Forensic Audit of WCCUSD’s Construction Bond Program

In early September 2016, West Contra Costa Unified School District released the Preliminary Phase II Forensic Audit Report, conducted by Certified Public Accounting firm Vicenti, Lloyd & Stutzman (VLS). This forensic audit is a key step forward for our community, providing the opportunity to develop healthy and transparent financial practices in service of students. Over many months of listening, we’ve heard the belief among West Contra Costa families and educators that the district’s funds are precious and limited. We’ve heard a strong desire that resources be used appropriately and effectively for kids.

WHAT IS THE FORENSIC AUDIT?

This forensic audit is focused on our school district’s construction bond program and associated spending. VLS delivered a nearly 1,500 page report after seven months of document review, interviews, and investigation. Check out the resources below to learn about forensic audits in general and in relation to WCCUSD:

The report contains many findings and pieces of evidence. District staff and the wider community are taking time to read through and discuss the report as a whole to determine next steps.

Below are some key messages and findings from the summary section of the Forensic Audit Report. Click here to view the Executive Summary.

VLS was hired to review our school district’s spending history and budget, contract, and financial management practices to identify areas of high, medium, or low risk. Sixteen Test of Controls (TC) areas were investigated, reviewed, and evaluated for risk. More specifically, the auditing firm performed Test of Controls exercises to evaluate the effectiveness and/or existence of WCCUSD’s financial safeguard systems.

In January 2016, VLS released an early Phase I of the forensic audit, which found 36 out of 51areas of WCCUSD’s construction bond program were at “high risk” for fraud. Overall, there was a reduction of high risk practices between Phase I to Phase II. In the Phase II Report, VLS stressed that the Budget Practices area is now the area of highest concern and urgency, and offered 15specific recommendations for WCCUSD.

“The one risk area category that remains High is ‘Budgeting Practices.’ There are five High risk areas. This is a decrease of just one [high risk area] from Phase I. The District has considerable work in this area to address lowering the risk scores. VLS has made 15specific recommendations for the District to consider implementing to lower the New Risk Score in the ‘Budgeting Practices’ area. VLS recommends that addressing the ‘Budgeting Practices’ risk area category and the implementation of the related specific recommendations be a high priority of the District.” (Report page 12)

OVERALL RECOMMENDATIONS

The Executive Summary of the report concludes with four overall recommendations for WCCUSD moving forward, excerpted below.

Closing Statement

In addition to assigning New Risk Scores to the Phase II Matrix [and] making 78 specific recommendations to lower New Risk Scores, VLS also makes the following four recommendations for the overall operational and administrative efficiencies of the Bond Program:

  • The District should ensure that an effective FRAUD REPORTING MECHANISM [sic] is in place for reporting known or potential wrongdoing impacting the District Bond Program.
  • The District should ensure ongoing FRAUD and ETHICS TRAINING [sic] is provided to all employees of the District, especially those associated with the Bond Program.
  • The District should evaluate the adequacy of resources assigned to the INTERNAL AUDIT DEPARTMENT [sic] for review of the Bond Program.
  • VLS strongly encourages the establishment of the “Recommendations Implementation Task Force” so accountability measures are put in place by the District to ensure all recommendations for work completed in Phase II are adequately assessed and implemented.

We look forward to hearing the plan for improvement and changed practices to result from this report and the recommendations being made by VLS. We’ll continue to keep you informed once a timeline for action has been determined. Thank you for engaging and sharing news that can help to shape the path forward for all of our students and schools.

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