Report 2017-104 All Recommendation Responses

Report 2017-104: Montebello Unified School District: County Superintendent Intervention Is Necessary to Address Its Weak Financial Management and Governance (Release Date: November 2017)

Recommendation #1 To: Los Angeles County Office of Education

To ensure that Montebello takes the steps necessary to prevent state intervention and regain its positive financial certification, the county superintendent should direct Montebello to submit a corrective action plan to address the issues identified in this report including balancing its budget, amending and adhering to its hiring procedures, and establishing adequate safeguards to ensure that policies related to bond proceeds, conflicts of interest, and the approval of expenditures are implemented and followed.

6-Month Agency Response

Fiscal Advisor still in place

  • Completion Date: January 2018
  • Response Date: June 2018

California State Auditor's Assessment of 6-Month Status: Pending

LACOE should instruct Montebello to submit a corrective action plan to address issues identified in this report including balancing its budget, amending and adhering to its hiring procedures, and establishing adequate safeguards to ensure that policies related to bond proceeds, conflicts of interest, and the approval of expenditures are implemented and followed.


60-Day Agency Response

Communicated with the district leadership during the budget approval process providing direction including the placement of a Fiscal Advisor in the district.

  • Completion Date: October 2017
  • Response Date: January 2018

California State Auditor's Assessment of 60-Day Status: Pending

LACOE provided us with its correspondence with Montebello on the various issues Montebello needs to address. LACOE should also instruct Montebello to submit a corrective action plan to address issues identified in this report including balancing its budget, amending and adhering to its hiring procedures, and establishing adequate safeguards to ensure that policies related to bond proceeds, conflicts of interest, and the approval of expenditures are implemented and followed.

  • Auditee did not address all aspects of the recommendation

Recommendation #2 To: Los Angeles County Office of Education

To ensure that Montebello takes the steps necessary to prevent state intervention and regain its positive financial certification, the county superintendent should assist Montebello in developing a plan to justify its workforce size and cost in terms of its current and projected enrollment, including evaluating the necessity of current staff levels and personnel costs.

6-Month Agency Response

The district submitted a Fiscal Stabilization Plan (FSP) to LACOE on September 20, 2017. Not all actions have been implemented at this time. Full implementation will be reviewed at the time of 2018/19 budget submission by July 1, 2018.

  • Estimated Completion Date: July 1, 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

We have concerns with the fiscal stabilization plan Montebello submitted to LACOE on September 20, 2017. In a November 8, 2017, letter to Montebello, LACOE stated that Montebello's fiscal stabilization plan does not address staffing concerns and does not address staffing issues related to declining enrollment.


60-Day Agency Response

District under the guidance of a Fiscal Advisor who will implement the above recommendations. Will provide information under separate email cover.

  • Estimated Completion Date: June 2018
  • Response Date: January 2018

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #3 To: Los Angeles County Office of Education

To ensure that Montebello takes the steps necessary to prevent state intervention and regain its positive financial certification, the county superintendent should evaluate the necessity of executive positions and adjust executives' salaries based on an analysis of the number and cost of executives in comparable districts.

6-Month Agency Response

While a Fiscal Advisor currently is assigned to the District, key leadership positions remain unfilled. The district is currently recruiting for a Cheif Business Official. Expected to have a new CBO by June 2018. Director of Fiscal Services has just been hired with a start date of May 4, 2018.

  • Estimated Completion Date: July 1, 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

LACOE should ensure that it evaluates the necessity of executive positions and adjust executives' salaries based on an analysis of the number and cost of executives in comparable districts.


60-Day Agency Response

District under the guidance of a Fiscal Advisor who will implement the above recommendations. Will provide information under separate email cover.

  • Estimated Completion Date: July 2018
  • Response Date: January 2018

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #4 To: Los Angeles County Office of Education

To ensure that Montebello takes the steps necessary to prevent state intervention and regain its positive financial certification, the county superintendent should ensure that Montebello implements all of the recommendations detailed in the report.

6-Month Agency Response

Superintendent and Board of Education continue to work together in addressing all the recommendations in the CSA Report. Progress is being made and it is expected all items will be addressed by November 2, 2018.

  • Estimated Completion Date: November 2, 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

The Governing Board of the District has passed resolutions to implement the fiscal stabilization plan and to work cooperatively with the LACOPE Fiscal Expert. Will provide copies of Board Resolutions under separate email cover.

  • Estimated Completion Date: July 2018
  • Response Date: January 2018

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #5 To: Montebello Unified School District

To improve its current financial condition and ensure future viability, Montebello should, within 60 days, revise its fiscal stabilization plan and make the necessary cuts to fund its ongoing commitments.

6-Month Agency Response

In the current year, MUSD has reviewed its staffing and will be submitting a Resolution for layoff of three classified management, supervisory, and confidential positions. In addition, through attrition, vacant positions were filled by internal transfers. During year two and year three of the multi-year projections, MUSD will exercise reductions in force, on an as needed basis, to address declining student enrollment.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello has not provided us with a revised fiscal stabilization plan. In its November 8, 2017, letter to Montebello, LACOE stated that Montebello's fiscal stabilization plan does not address staffing concerns and does not address staffing issues related to declining enrollment. Further, in its April 2018 response to Montebello's 2017-18 Second Interim Report, LACOE stated that Montebello must assess and adjust its staffing needs for the upcoming years based on the projected rate of decline in enrollment. LACOE further noted that Montebello is projecting an operating deficit of $22.4 million for fiscal year 2019-20. To ensure future viability, Montebello should revise its fiscal stabilization plan and make the necessary cuts to fund its ongoing commitments.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

MUSD continues addressing its ongoing commitments and ability to meet its priorities, including maintaining the legally required level of reserves. Effective November 8, 2017, MUSD was assigned a Los Angeles County Office of Education (LACOE) Fiscal Adviser, Mr. Mark Skvarna, who on an on-going manner is assisting with all fiscal matters. Furthermore, on December 21, 2017, the Board of Education approved the First Interim Budget with a "Positive" certification. A budget monitoring process is also evident via the Revenue and Expense Committee whereby representatives from the District Office, Classified School Employees Association (CSEA), Montebello Teacher Association (MTA), and Association of Montebello School Administrators (AMSA) meet to review the annual allocated budget and expenditures on a monthly basis.

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

In a November 8, 2017 letter to Montebello, LACOE stated that Montebello's fiscal stabilization plan does not address staffing concerns and does not address staffing issues related to declining enrollment.

  • Auditee did not address all aspects of the recommendation

Recommendation #6 To: Montebello Unified School District

To improve its current financial condition and ensure future viability, Montebello should create a robust budgeting process within 90 days using best practices of the Government Finance Officers Association to ensure Montebello's ability to meet its priorities while maintaining the required level of reserves that buffers the district from drastic cuts in times of economic instability.

6-Month Agency Response

MUSD continues to work with staff to discuss budget development including review of expenditures across all funding sources. Departments have been directed that funding level will be at a ten percent reduction across the board for fiscal year 2018-2019 and 2019-2020. This will be included in our adopted budget and narrative for the 2018-2019 fiscal year provided to the Los Angeles County Office of Education (LACOE) for the next three years and will be subject to their approval.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello should review the best practices of the Government Finance Officers Association when creating its budgeting process.


60-Day Agency Response

MUSD continues addressing its ongoing commitments and ability to meet its priorities, including maintaining the legally required level of reserves. Effective November 8, 2017, MUSD was assigned a Los Angeles County Office of Education (LACOE) Fiscal Adviser, Mr. Mark Skvarna, who on an on-going manner is assisting with all fiscal matters. Furthermore, on December 21, 2017, the Board of Education approved the First Interim Budget with a "Positive" certification. A budget monitoring process is also evident via the Revenue and Expense Committee whereby representatives from the District Office, Classified School Employees Association (CSEA), Montebello Teacher Association (MTA), and Association of Montebello School Administrators (AMSA) meet to review the annual allocated budget and expenditures on a monthly basis.

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello's proposed monitoring process does not address the recommendation. Montebello needs to create a budgeting process to develop and implement a planned budget. Montebello should review the best practices of the Government Finance Officers Association when creating its budgeting process.

  • Auditee did not address all aspects of the recommendation

Recommendation #7 To: Montebello Unified School District

To improve its current financial condition and ensure future viability, Montebello should, within 90 days, implement an effective budget monitoring process with regular budget-to-actual comparisons. This process should include safeguards against spending in excess of budgeted expenditures and require advance board approval of such spending before it occurs. For example, Montebello should require that the budget manager perform monthly reviews of budget-to-actual figures and provide detailed explanations to the board for any variances.

6-Month Agency Response

The LACOE has informed MUSD that any unfunded expenditures exceeding $25,000 could not be approved by the Board without LACOE's approval (Nov. 28, 2017. The Director of Fiscal Services is working with staff to make sure monthly reviews of budget-to-actual figures becomes the norm.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

This is a temporary measure while the LACOE Fiscal Advisor is assigned to Montebello and not part of the budget monitoring process. Montebello has not demonstrated that it has implemented safeguards against spending in excess of budgeted expenditures.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

MUSD continues addressing its ongoing commitments and ability to meet its priorities, including maintaining the legally required level of reserves. Effective November 8, 2017, MUSD was assigned a Los Angeles County Office of Education (LACOE) Fiscal Adviser, Mr. Mark Skvarna, who on an on-going manner is assisting with all fiscal matters. Furthermore, on December 21, 2017, the Board of Education approved the First Interim Budget with a "Positive" certification. A budget monitoring process is also evident via the Revenue and Expense Committee whereby representatives from the District Office, Classified School Employees Association (CSEA), Montebello Teacher Association (MTA), and Association of Montebello School Administrators (AMSA) meet to review the annual allocated budget and expenditures on a monthly basis.

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not demonstrated that it has implemented safeguards against spending in excess of budgeted expenditures or that it requires advance board approval of such spending before it occurs.

  • Auditee did not address all aspects of the recommendation

Recommendation #8 To: Montebello Unified School District

To ensure that Montebello hires the most qualified executive and management staff, Montebello should immediately adhere to its policies for hiring classified employees, including screening candidates to ensure that they meet the minimum qualifications. Montebello should also hold provisional employees to the same standards for minimum
qualifications as its policy requires.

6-Month Agency Response

MUSD will continue to hire the most qualified classified employees by ensuring that they meet the minimum qualifications and holding provisional employees to the same standards. MUSD will continue advertising vacant positions inside and outside of MUSD. MUSD has posted the Assistant Superintendent of Educational Services, Chief Business Officer, Director of Educational Services, Director of Human Resources, (2) Principal-Elementary. Furthermore, the Director of Fiscal Services and Director of Maintenance, Operations, and Facilities Development positions were also flown inside and outside of MUSD. As requested by the State Auditor, we will submit the documentation once the process has been completed from beginning to end. At this time, we do not have the above mentioned positions filled including Board approval.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will continue to hire the most qualified classified employees by ensuring that they meet the minimum qualifications and holding provisional employees to the same standards. MUSD will continue advertising vacant positions inside and outside of MUSD. MUSD has posted the Chief Business Officer position and has most recently revised the associated salary schedule. Furthermore, the Director of Fiscal Services position has also been revised and will be posted for the selection of a successful candidate.

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not demonstrated that it has adhered to its policies for hiring classified employees, including screening candidates to ensure that they meet the minimum qualifications.

  • Auditee did not address all aspects of the recommendation

Recommendation #9 To: Montebello Unified School District

To ensure that Montebello hires qualified classified employees, the personnel commission should, within 90 days, revise its policies to require the classified director to provide it with the education and work experience of any candidates on eligibility lists for high-ranking positions. It should also require the director of the personnel commission—the classified director—to provide it with a list of all provisional appointments, including information on how those employees meet the minimum qualifications.

6-Month Agency Response

The Director of Classified Human Resources is providing the personnel commission a spreadsheet with the names and dates of assignments for all temporary, provisional, as needed, limited term, and out of class assignments.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not demonstrate that it implemented the recommendation. Montebello did not provide evidence that the personnel commission revised its policies as recommended.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

The Director of Classified Human Resources will provide the Personnel Commission with the education and work experience of all candidates on the eligibility lists for high-ranking positions, as well as how the minimum qualifications are met for all provisional appointments.

  • Estimated Completion Date: 2/2/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #10 To: Montebello Unified School District

To ensure that it does not violate state law, Montebello should immediately adhere to its policies and ensure that provisional employees do not work more than the legal maximum number of days of service.

6-Month Agency Response

MUSD will continue to ensure that provisional employees do not exceed the legal maximum number of days of service. At this time, MUSD has not made any provisional appointments.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Per its response, Montebello has not made any provisional appointments. We will assess Montebello's actions to implement this recommendation once it makes a provisional appointment.

  • Auditee did not substantiate its claim of full implementation

60-Day Agency Response

MUSD will continue to ensure that provisional employees do not exceed the legal maximum number of days of service. At this time, MUSD has not made any provisional appointments.

  • Completion Date: October 2016
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Per its response, Montebello has not made any provisional appointments. We will assess Montebello's actions to implement this recommendation once it makes a provisional appointment.

  • Auditee did not address all aspects of the recommendation

Recommendation #11 To: Montebello Unified School District

To ensure that Montebello hires executives who meet the minimum qualifications, it should verify that such individuals hold both an administrative and teaching credential before appointing them to a position of superintendent or assistant superintendent.

6-Month Agency Response

MUSD anticipates fulfilling this recommendation on June 17, 2018. At that time, the Assistant Superintendent of Educational Services is scheduled to be presented for Board approval.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will continue to ensure that candidates hired for an executive position hold both an administrative and a teaching credential. At this time, MUSD has not hired any candidates for executive positions.

  • Completion Date: July 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Per its response, Montebello has not yet hired for executive positions. We will assess Montebello's actions to implement this recommendation once it fills an executive position.

  • Auditee did not address all aspects of the recommendation

Recommendation #12 To: Montebello Unified School District

In order to rebuild trust with its community, Montebello should adhere to its policies for hiring certificated personnel and fill any vacant positions for executives through a competitive hiring process, including advertising the positions, screening to ensure that minimum qualifications are met, and interviewing to ensure that it hires and retains the most qualified and talented leaders.

6-Month Agency Response

MUSD has hired a permanent superintendent and followed a competitive hiring process, including advertising, screening to ensure that minimum qualifications were met, and interviewing the candidates. Currently, MUSD is following all of the mentioned steps for the Assistant Superintendent of Educational Services, Director of Educational Services, Director of Human Resources, Principal-Elementary. These positions have been advertised inside and outside the district (e.g., Edjoin, Edcal). As requested by the State Auditor-documentation will be submitted once the process has been conducted from beginning to end.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not provide documentation demonstrating that it followed a competitive hiring process when hiring the permanent superintendent. Per Montebello's response, we will evaluate Montebello's actions to implement this recommendation once it submits the documentation of the process being conducted from beginning to end.


60-Day Agency Response

MUSD will continue to ensure that it hires certificated personnel through a competitive hiring process, including advertising the positions (inside and outside of MUSD), screening, and interviewing to ensure that the most qualified and talented leader is hired and retained. Most recently, MUSD has recently hired a Director of Head Start.

  • Completion Date: July 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

In a November 28, 2017 letter to Montebello, LACOE stated it is concerned about critical vacancies at the district, including a permanent superintendent. When filling this position and other key vacancies, Montebello should ensure it uses a competitive hiring process, including advertising the positions, screening to ensure that minimum qualifications are met, and interviewing to ensure that it hires and retains the most qualified and talented leaders. Further, Montebello's documentation did not demonstrate that it screened candidates when hiring for the Director of Head Start.

  • Auditee did not address all aspects of the recommendation

Recommendation #13 To: Montebello Unified School District

To ensure that Montebello creates employee positions only when necessary, it should establish a policy within 30 days that requires a justification for why the district is creating a position. Additionally, in order to maintain transparency when creating new positions, Montebello should immediately begin to document its justifications.

6-Month Agency Response

MUSD has been focusing on best practices and is currently working on presenting the Board of Education with a policy that would provide justification on why a position is being created. Internally, Executive Cabinet has been guiding and providing coaching to administrators when new positions are being proposed, its impact to the budget, and the process and documentation to support said positions.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will continue with the practice of requiring a valid justification on the personnel request forms for all assignments. The justification and funding source will continue to be included on all agendas presented for Board of Education approval.

  • Completion Date: October 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not demonstrated that it has established a policy that requires a justification for why the district is creating a position.

  • Auditee did not address all aspects of the recommendation

Recommendation #14 To: Montebello Unified School District

To ensure that Montebello hires qualified certificated and classified employees, within 90 days the board should revise its policies to require the superintendent or his or her designee to provide information to the board about recruitments for high-ranking employees. The board should consider, at a minimum, the following information when approving appointments:
- The number of initial applicants.
- The number of candidates who passed the screening and interviewing steps.
- The education and work experience of the final candidate recommended by the superintendent or designee.

6-Month Agency Response

MUSD continues working on formalizing a policy that would provide the minimum recommended information. Currently, that information is being provided to the Board of Education, but is not reflected in a written policy.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Per Montebello's response, we will assess Montebello's actions to implement this recommendation once it revises its policy. Further, Montebello has not provided documentation demonstrating that it currently provides this information to the board.


60-Day Agency Response

MUSD will continue providing the Board of Education with information on the interview process, the number of initial applicants, the number of candidates who passed the screening, the number of candidates interviewed, as well as the education and work experience of the final candidate. Most recently, MUSD exercised this practice when selecting the Director of Head Start.

  • Completion Date: July 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not fully implemented this recommendation. It should revise its policies to require the superintendent or his or her designee to provide information to the board about recruitments for high-ranking employees.

  • Auditee did not address all aspects of the recommendation

Recommendation #15 To: Montebello Unified School District

To ensure that Montebello is making hiring decisions free of bias or favoritism, within 90 days it should strengthen its hiring policies related to nepotism and conflicts of interest for classified and certificated personnel to include the following: establishing restrictions on immediate family members being involved in the screening and interviewing processes and definitions of what types of personal relationships fall under the nepotism policy, which work relationships the nepotism policy applies to, and what factors to consider when evaluating the potential impact of a personal relationship.

6-Month Agency Response

MUSD has a Board revised Board approved policy for employment of relatives, which addresses nepotism and conflicts of interest.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Partially Implemented

Montello's updated policy applies to relatives, spouses, and domestic partners. However, Montebello did not include in its updated policy the definitions of what types of other personal relationships fall under the nepotism policy, which work relationships the nepotism policy applies to, and what factors to consider when evaluating the potential impact of a personal relationship.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

MUSD will continue working on strengthening its hiring policies to ensure that its employment decisions are free of bias, favoritism, nepotism, and/or conflict of interest for classified and certificated personnel.

  • Estimated Completion Date: 2/22/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #16 To: Montebello Unified School District

To ensure that bond funds are spent appropriately, the district should immediately ensure that its bond committee meets at least once per year.

6-Month Agency Response

MUSD's CBOC has met at least once per year. The following are additional meeting dates:

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Montebello's bond committee has met at least once in 2018.


60-Day Agency Response

MUSD will continue ensuring that its Citizens Bond Oversight Committee (CBOC) meets at least once a year. The CBOC met September 2017. CBOC attempted to meet again on December 13, 2017, but the meeting did not take place due to a lack of quorum. The next meeting has been scheduled for January 18, 2018.

  • Completion Date: September 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Per Montebello's response, pending meeting on January 18, 2018.


Recommendation #17 To: Montebello Unified School District

To ensure that bond funds are spent appropriately, the district should immediately ensure that the bond committee member positions are filled.

6-Month Agency Response

MUSD continues to work closely with the CBOC and will ensure that bond committee member positions are filled should they become vacant.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Fully Implemented

As of August 2018, Montebello's website showed that all positions on the bond committee were filled.


60-Day Agency Response

MUSD has received notification that some of the CBOC members are no longer able to serve on the committee. As such, on December 7, 2017, the Board of Education approved the removal of resigned CBOC members in an effort to continue the process of filling the vacant positions.

  • Estimated Completion Date: 2/22/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #18 To: Montebello Unified School District

To ensure that bond funds are spent appropriately, the district should immediately require that its contracted project manager provides detailed bond expenditure reports for all relevant bonds to the bond committee at least biannually.

6-Month Agency Response

MUSD's contracted program manager is providing detailed bond expenditure reports for Measure GS bond.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello has not demonstrated that this recommendation is fully implemented. Montebello needs to require that its contracted project manager provides to the bond committee at least annually the detailed bond expenditures for all relevant bonds .

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

The CBOC attempted to meet again on December 13, 2017, but the meeting did not take place due to a lack of quorum. The next meeting has been scheduled for January 18, 2018.

  • Completion Date: September 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not demonstrated that this recommendation is fully recommended. Montebello needs to require that its contracted project manager provides detailed bond expenditure reports for all relevant bonds to the bond committee at least biannually.

  • Auditee did not address all aspects of the recommendation

Recommendation #19 To: Montebello Unified School District

To ensure that bond funds are spent appropriately, the district should immediately ensure that its contracted auditor delivers a timely bond audit and that Montebello addresses the auditor's concerns and recommendations.

6-Month Agency Response

MUSD has completed a bond audit and is committed to addressing the recommendations.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello has not demonstrated that it ensured that its contracted auditor delivered a bond audit for all of the active bond measures.

  • Auditee did not substantiate its claim of full implementation

60-Day Agency Response

MUSD has contracted Christy White Associates to conduct a complete bond audit and is committed to addressing the State Auditor's concerns and recommendations.

  • Estimated Completion Date: 2/22/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #20 To: Montebello Unified School District

To ensure that staff who make or influence district decisions are free from perceived or actual conflicts of interest, Montebello should immediately identify all positions whose incumbents make or influence district decisions and designate those not already identified in its conflict-of-interest policy.

6-Month Agency Response

MUSD has updated is conflict of interest policy and includes positions previously not identified.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not identify in its policy all of the positions that we identified during the audit whose incumbents make or influence district decisions, including the hazardous materials coordinator and the facilities projects coordinator.


60-Day Agency Response

MUSD will require all employees approving contracts or expenditures to file a statement of economic interests. Amongst the positions are: Director, Elementary Education; Director, Secondary Education; Director, Special Education; Director, Maintenance, Operations & Facilities; Director, Nutrition Services; Director, Fiscal Services; Director, Adult Education & Support Services; Director, Pupil & Community Services; Director, Administrative Services; Director, Procurement/Logistics, Director, Head Start; Chief of Police Services; Director, Certificated Personnel; Director, Classified Human Resources; Operations Manager; Maintenance Manager; Facilities Projects Manager; Transportation Manager; Budget Manager

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello did not identify all of the positions whose incumbents make or influence district decisions that we identified during the audit, including the hazardous materials coordinator and the facilities projects coordinator. Further, Montebello should designate the positions in its conflict-of-interest policy.

  • Auditee did not address all aspects of the recommendation

Recommendation #21 To: Montebello Unified School District

To ensure that staff who make or influence district decisions are free from perceived or actual conflicts of interest, Montebello should immediately require designated employees to file statements of economic interests and adhere to its conflict-of-interest policy.

6-Month Agency Response

MUSD has requested of the designated positions to file a statement of economic interests. They are filed in the Superintendent's Office and those required to be filed with the L.A. County Supervisors have been sent.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not demonstrate that all designated employees -- such as all of the members of the board of education and members of the bond oversight committee -- filed statements of economic interests.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

MUSD will require all employees approving contracts or expenditures to file a statement of economic interests. Amongst the positions are: Director, Elementary Education; Director, Secondary Education; Director, Special Education; Director, Maintenance, Operations & Facilities; Director, Nutrition Services; Director, Fiscal Services; Director, Adult Education & Support Services; Director, Pupil & Community Services; Director, Administrative Services; Director, Procurement/Logistics, Director, Head Start; Chief of Police Services; Director, Certificated Personnel; Director, Classified Human Resources; Operations Manager; Maintenance Manager; Facilities Projects Manager; Transportation Manager; Budget Manager

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not demonstrated that designated employees filed statements of economic interests.

  • Auditee did not address all aspects of the recommendation

Recommendation #22 To: Montebello Unified School District

To ensure that staff who make or influence district decisions are free from perceived or actual conflicts of interest, Montebello should, within 60 days, expand its policy to require all employees approving contracts or expenditures to be designated and file a statement of economic interests.

6-Month Agency Response

MUSD has updated is conflict of interest policy and includes positions previously not identified. MUSD has requested of the designated positions to file a statement of economic interests. They are filed in the Superintendent's Office and those required to be filed with the L.A. County Supervisors have been sent.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not identify in its policy all of the positions hat we identified during the audit whose incumbents approve contracts or expenditures, including the hazardous materials coordinator and the facilities projects coordinator.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

MUSD will require all employees approving contracts or expenditures to file a statement of economic interests. Amongst the positions are: Director, Elementary Education; Director, Secondary Education; Director, Special Education; Director, Maintenance, Operations & Facilities; Director, Nutrition Services; Director, Fiscal Services; Director, Adult Education & Support Services; Director, Pupil & Community Services; Director, Administrative Services; Director, Procurement/Logistics, Director, Head Start; Chief of Police Services; Director, Certificated Personnel; Director, Classified Human Resources; Operations Manager; Maintenance Manager; Facilities Projects Manager; Transportation Manager; Budget Manager

  • Completion Date: December 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not expanded its policy to require all employees approving contracts or expenditures to be designated and file a statement of economic interests.

  • Auditee did not address all aspects of the recommendation

Recommendation #23 To: Montebello Unified School District

To ensure that Montebello spends its funds for allowable and reasonable purposes, it should require employees whose salaries are funded by voter-approved bond proceeds to fill out detailed timesheets to demonstrate that they work on bond-related activities. Bond proceeds should only be used to pay the portion of the salary relating to bond-funded activities that is supported by the timesheet.

6-Month Agency Response

MUSD will continue to work on identifying the positions that need the funding source changed. Multiple meetings have taken place to discuss this process between Maintenance, Operations, and Facilities, and the Finance Department. Documentation will be submitted demonstrating that this change is taking place.

  • Estimated Completion Date: 6/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will continue working on requiring all employees whose salaries are funded by approved bond proceeds to fill out a detailed timesheet demonstrating the work associated with bond related activities.

  • Estimated Completion Date: 2/2/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #24 To: Montebello Unified School District

To ensure that Montebello spends its funds for allowable and reasonable purposes, it should implement an inventory tracking system that allows it to know where its equipment is located. Montebello should also periodically review its inventory listing to ensure that equipment is being properly used.

6-Month Agency Response

MUSD continues to evaluate inventory tracking systems. MUSD administrators recently attended CASBO where the opportunity to learn about products in the market were presented. MUSD is mindful that LACOE will be releasing an inventory tracking system that is tied to BEST.

  • Estimated Completion Date: 11/2/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will continue with the process of evaluating inventory tracking systems to account for its equipment and will need additional time to make the best selection based on district needs.

  • Estimated Completion Date: 4/19/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #25 To: Montebello Unified School District

To ensure that Montebello spends its funds for allowable and reasonable purposes, it should close the adult education fund's revolving fund account.

6-Month Agency Response

MUSD has closed the revolving fund account. Documentation will be submitted.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello has not provided support that it has closed the adult education fund's revolving fund account.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

As of October 2017, the Adult Education revolving fund account was closed.

  • Completion Date: October 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello has not provided support that it has closed the adult education fund's revolving fund account.

  • Auditee did not substantiate its claim of full implementation

Recommendation #26 To: Montebello Unified School District

To ensure that Montebello spends its funds for allowable and reasonable purposes, it should require all employees to obtain approval for overtime before performing any overtime work and to submit an explanation of tasks they completed during their overtime work when they submit their overtime timesheet for payment.

6-Month Agency Response

MUSD has implemented a process whereby overtime approval is required prior to the work being done and timesheets include the description of the services performed.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not demonstrate that employees obtained approval for overtime before working overtime.


60-Day Agency Response

By November 2017, MUSD will implement its overtime policy and require that all employees obtain prior approval before performing overtime work.

  • Completion Date: November 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello did not provide any support to show that employees obtain approval for overtime before working overtime.

  • Auditee did not substantiate its claim of full implementation

Recommendation #27 To: Montebello Unified School District

To ensure that Montebello spends its funds for allowable and reasonable purposes, it should follow the procedures in its purchase card manual including requiring employees to submit receipts for all purchases made with the card. If in violation of the manual, suspend or cancel the employee's card privileges and require employees to reimburse the district for improper purchases.

6-Month Agency Response

MUSD does require receipts for purchases made with purchase cards. Documentation will be submitted.

  • Completion Date: May 2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending

Montebello did not demonstrate that it is ensuring that employees submit receipts for purchases made with purchase cards.


60-Day Agency Response

By November 2017, MUSD will initiate an Administrative Regulation requiring all employees using a purchase card to submit receipts for all purchases, and payments will not be made until approved by an appropriate official.

  • Completion Date: November 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending

Montebello did not provide any support to show that it ensures employees submit receipts for purchases made with purchase cards.

  • Auditee did not substantiate its claim of full implementation

Recommendation #28 To: Montebello Unified School District

To ensure that state adult education expenditures are reasonable and justified, the board should, within one year, develop a policy that requires adult education classes to meet specific minimum thresholds for class size. If classes do not meet these thresholds, the adult program must cancel the class

60-Day Agency Response

MUSD has submitted to the Board of Education a policy requiring adult education classes to meet specific class size thresholds. If classes do not meet the minimum threshold, they will be closed.

  • Completion Date: November 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Montebello has developed a policy that requires adult education classes to meet specific minimum thresholds for class size.


Recommendation #29 To: Montebello Unified School District

To ensure that state adult education expenditures are reasonable and justified, the board should, within one year, require the adult program to annually report to the consortium
and to the board on the accurate number of students in each class, number of hours taught, and cost of the class per student.

6-Month Agency Response

MUSD will submit to the Board of Education and consortium a fiscal annual (July 1-June 30) report (in the month of August) identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student.

  • Estimated Completion Date: 8/30/2018
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD will submit to the Board of Education and consortium a fiscal annual (July 1- June 30) report (in the month of August) identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student.

  • Estimated Completion Date: 08/30/2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #30 To: Montebello Unified School District

To improve the cash collection process, Montebello should ensure that the adult program has adequate safeguards in place to minimize the risk of misuse of funds. It should specifically, within 60 days, implement policies and procedures that align with best practices for cash collection and cash deposits that include robust safeguards such as ensuring separation of duties in the cash collection process.

60-Day Agency Response

As of October 2017, MUSD has implemented a cash receipt policy and a new enrollment system that allows students extended payment options for their tuition and fees.

  • Completion Date: October 2017
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As we noted in our report, in September 2017 we received a copy of the new cash receipt policies that addressed our concerns with the process. Montebello has provided documentation to demonstrate that it has implemented its new policy. To the extent that Montebello adheres to this new policy, it will resolve our concerns.


Recommendation #31 To: Los Angeles Regional Adult Education Consortium

To ensure that state adult education funds are used in the most efficient and effective manner, the consortium should, within one year, complete an assessment of Montebello's ability to meet the requirements of its adult education plan to determine whether its use of state funds has been effective. If Montebello is found to be consistently ineffective, the consortium should immediately recalculate the adult program's fund allocation for the future.

6-Month Agency Response

Additional steps implemented since the 60-day report as follows:

A. Per the request of the Executive Board, MUSD Adult Education developed a plan to reduce its allocation based on current and future program needs. The plan was presented to the LARAEC Executive Board and approved for implementation as of January 19, 2018. Exhibit 1A, MUSD Adult Education Plan to reduce its allocation. The plan was effective the current School Year and subsequent years thereafter. The plan included returning to the Consortium one- time funding (unused carryover $4,665,368 and unused Data and Accountability Funding $365,477, totaling $5,030,845). Exhibit 1B, LARAEC Open Meeting, January 19, 2018 Agenda and Minutes

B. The Consortium drafted and approved two MOUs to document the transactions that would result in the implementation of the approved MUSD Adult Education plan; one for one­time funding and the second for ongoing funding. Additionally, ongoing funding in the amount of $1,269,155 will be redistributed by July 31, 2018. Exhibit 1C, One Time Funding Redistribution MOU and Exhibit 1D, Ongoing Funding Redistribution

C. Lastly, the consortium also changed its Consortium Fiscal Administration Declaration, the document that informs the State of how the Consortium has elected to distribute its funds to the Member-Districts of the Consortium. Additionally, funding in the amount of $1,880,843 will be redistributed via SY 2018-19 CFAD, to be effective July 1, 2018. Exhibit 1E, Consortium Fiscal Administration Declaration

  • Estimated Completion Date: 09/30/18
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

MUSD Adult Education has reported to the consortium swift actions to address the audit report recommendations:

1. Has employed new leadership that is focused on improving and expanding adult education in MUSD according to LARAEC's Regional Comprehensive Plan. Exhibit 1

2. Demonstrated transparency by implementing credible, verifiable, and data-supported adult education enrollment and budget information. This includes:

a. Implementing a Student Information System (September 2017) and procedures to ensure the reliable collection of students data - Exhibit 2a

b. Implementing Student to Teacher ratios per MUSD Board Policy adopted on November 2, 2017. The ratios are intended to address efficiency by reducing/eliminating classes with low attendance. Exhibit 2b

c. Planning new high demand CTE programs with articulation agreements with Los Angeles Trade Technical College (LATTC) for the spring, 2018 supporting the strategies listed on LARAEC's Regional Comprehensive Plan. Exhibit 2c

3. Redoubled its efforts to address the unmet needs of community members by growing a neglected adult education student base. Marketing efforts designed to inform prospective students of the programs and services offered by the school (81% of MUSD's 26,590 students, 19,873 are on the free or reduced lunch program: Synergy System, Report PGM402) have been employed. Current unduplicated enrollment is 4,561 with an expected 6,000 unduplicated students by the end of the academic year. Exhibit 3a and 3b

4. MUSD Adult Education is currently projecting the return of funds to LARAEC based on identified consortium students' needs of all member-districts. These funds will be reallocated to other programs. Exhibit 4

5. LARAEC has scheduled a Special Meeting to take action on the following Agenda Items:

a. Determine the specific amount that Montebello Adult Education is to return to LARAEC Exhibit 5a

b. Reallocate returned funds to the other LAREAC members Exhibit 5b

  • Estimated Completion Date: March 31, 2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #32 To: Los Angeles Regional Adult Education Consortium

To ensure that state adult education funds are used in the most efficient and effective manner, the consortium should, within one year, develop policies and procedures to ensure the proper collection and reporting of enrollment, attendance, and expenditure data by consortium members. Periodically review enrollment, attendance, and expenditure data to ensure their accuracy.

6-Month Agency Response

Additional steps implemented since the 60-day report are as follows:

1. The LARAEC board-approved quarterly report metrics and MUSD will submit its first report to the consortium starting on August 15, 2018. Exhibit Al February 23, 2018 Open Meeting Agenda and Minutes, Exhibit A2 March 16, 2018 Open Meeting Agenda and Minutes

2. Subsequent to the January 19, 2018 LARAEC Open Meeting, when the Executive Team directed the LARAE C's Project Director to solicit high level proposals from auditing firms, the Point Persons Team presented to the Executive Board auditing firm's proposal without consensus on who to hire during the March 16, 2018 LARAEC Open Meeting. Exhibit A2 March 16, 2018 Open Meeting Agenda and Minutes. Subsequently, the Executive Board directed the Point Persons Team to hold a Bidders' Conference. The Bidders' Conference is scheduled for May 24, 2018.

  • Estimated Completion Date: 09/30/18
  • Response Date: May 2018

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

1. LARAEC will require quarterly reports from Montebello Adult Education to provide updates on MUSDs efforts to ensure effectiveness of services, growth targets, and expenditures consistent with goals and activities aligned with LARAECs Regional Comprehensive Plan Exhibit 5b (Exhibit 5b - LARAEC's Open Meeting Agenda and Minutes, will be available subsequent to January 19, 2018, the meeting's date)

2. LARAEC will retain an independent auditor to review performance and fiscal activities. Exhibit 5b

  • Estimated Completion Date: March 31, 2018
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


All Recommendations in 2017-104

Agency responses received are posted verbatim.