PUSD hires forensic accountant to review bonds
By Emily Sorensen
The Poway Unified School District has hired a forensic accountant to review the details of last year’s controversial $105 million capital appreciation bond (CAB) that will cost district taxpayers nearly $1 billion by the time it is paid off in 40 years.
A “highly qualified, independent forensic accountant and former FBI official,” has been hired, Supt. John Collins said in a statement read at Monday night’s school board meeting. The accountant is with the firm ESI International, which is a private investigative company that works with the FBI internationally, as well as in San Diego and Los Angeles.
It was unknown Tuesday how the firm was selected, how long the investigation will take, how much it will cost or how it will be financed.
In his statement Monday night, Collins said, “the district is not seeking validation of its actions; it’s seeking answers to key questions that have been asked:
• Did the district act responsibly upon the market information it was given at the time?
• Was the district given advice and counsel based on the highest industry standards?
• Are there any issues of integrity with any parties involved in the transaction?
• Were the fees paid to the parties involved at or below industry standards?
• Were the processes that were followed acceptable industry standards?
District voters (living outside of Mello Roos districts) in February 2008 approved the issuance of $179 million in bonds to finance the completion of upgrades at 24 older PUSD schools. The specific type of bonds to be used and the conditions under which they would be sold were not specified in the measure’s wording. Last year the board authorized proceeding with the sale of CABs, a long-term financing measure, without a “call” feature that would have permitted refinancing of the bonds at some later date. Interest on the Proposition C bonds will compound and the first payment on them will not be made until Proposition U bonds, approved in 2002, are paid off in about 20 years.
District officials have said they had little choice but to proceed with the CABs as the district was facing the need to pay for a construction bridge loan due at the end of last year.
At the August school board meeting, district taxpayers voiced their anger and concerns over the Proposition C bond and the impact the long-term debt will have on future homeowners and their property taxes. One resident called on the school board to investigate, and it seems the school board has listened.
According to their website, ESI International, Inc., was founded in 1986 by former special agents of the Federal Bureau of Investigation, and provides private investigation and consulting services to the legal, financial, and business communities. They are licensed by the state of California and have their offices in San Diego. The website states, “ESI International’s principals and investigators are members of the Association of Certified Fraud Examiners, Society of Former Special Agents of the FBI, and various local and national investigation and trade organizations.”
Related posts:
- PUSD releases statement on school bonds
- School board meeting avoids ugly theatrics
- Editorial: Road to success, or Armageddon?
- PUSD not alone in high-interest financing
Short URL: http://www.pomeradonews.com/?p=28471
Posted by Emily Sorensen
on Sep 11 2012. Filed under Local News, Poway.
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There is nothing "independent" about a forensic accountant hired by the District to review the District. The only way for it to be a truly fair and impartial review would be to allow someone not being paid by the District to review the Board's actions. Of course this guy is going to find they did nothing wrong – that's what he's paid to do. AG Kamala Harris needs to get involved.
No one is disputing the integrity of the Board members. That's such a dumb question and completely politically motivated. How exactly can a forensic accountant even quantify "integrity?" What's the baseline for "integrity?"
How about intelligence, was is the baseline for intelligence?
MY COMMENTS ARE IN CAPS.
LET'S SEE NOW, THEY SAY…
"It was unknown Tuesday how the firm was selected, how long the investigation will take, how much it will cost or how it will be financed."
WELL WHAT DO WE KNOW SINCE WE DON'T KNOW: WHO, WHAT, WHEN, WHERE, WHY, HOW…OR HOW MUCH…OR WHO'S PAYING…DOES THIS SOUND FAMILIAR?
LET'S GO OUT AND SPEND THE TAXPAYERS MONEY…THEY WON'T MIND.
District officials have said they had little choice but to proceed with the CABs as the district was facing the need to pay for a construction bridge loan due at the end of last year.
THIS BICYCLE CONTINUES TO BACK-PEDDLE…FIRST IT WAS A GOOD DEAL, THEN IT WASN'T SUCH A GOOD DEAL, THEN SPIN-CONTROL, THEN THE TAX ASSESSOR AND OTHER STATE OFFICIALS ARE SAYING WHAT A ROTTEN DEAL IT WAS AND NOW THEY SAY THEY HAD LITTLE CHOICE IN ENTERING INTO THIS DEAL CUZ THE OTHER MONEY THEY GOT WAS GONE AND THEY NEEDED TO ROB PETER TO PAY PAUL…AGAIN…HMMMM
The state should also hire an auditor to make separate forensic digging about the these mysterious bonds that were shed. Hard answers are sought much like in a witch hunt.
Jessica, there is, apparently, nothing that can be done to undo what has happened. There is something that can be done to those who made it happen. Remember that in the 2014 election if any of them should decide to run.
In this case, I believe the sheep were herded, but we will, probably, never know who was the herder. I suspect the bond analyst was very influential and the majority just went along for the ride.
It was reported that at a board meeting, member Kimberley Beatty openly questioned a bond report, prompting the Superintendent to publicly admonish her to bring her questions to him first. If you don't agree with the this management style be sure to vote for someone who pledges not be driven by such questionable tactics.
Exactly Tom. We need to remove the current superintendent. Dr. Collins is not in an elected position. I have an opinion article running on another Poway publication that sets out specifically why Dr. Collins should be fired. I also received a notice that there is a some type of petition being circulated seeking his removal. I'm not sure how effective it will be since the current board seems intent on further denial and is "resentful" of any questions.
I have no way to know if Dr Collins is a good day to day administrator The folks on the front line would be best to answer that question., I do know he has made two egregious mistakes. The first being the prime mover of the CAB and the second, sanctioning an $180,000 study, without Board approval, possibly to salvage his reputation. He would have been smart to have had a board member suggest it. There are apparently a number of them in his camp.
It doesn't seem right that an individual is allowed to spend that much money without discussion, I guess when you are talking about the PUSD budget,that amount is considered chicken feed. Sure wish I was the chicken.
I think a solid indication of how he works on a day to day basis is how he has handled the bond issue and the fact that he was allowed to spent $150,000 without Board approval and continues to refuse to produce the contract. It speaks volumes about boundaries – or lack of them.