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.

Annual Follow-Up Agency Response From September 2023

On August 18, 2023, Montebello Unified School District's (MUSD) FY 23-24 budget and Local Control Accountability Plan (LCAP) were approved, however the following concerns were noted which may impact their fiscal solvency:

a. Projected deficit of approximately $29.65 million for FY 23-24 and projected deficits of $3.01 million for FY 24-25 and $10.33 million in FY 25-26

b. The Unrestricted General Fund ending balance is projected to decrease from a beginning balance of approximately $71.25 million in 2023-2024 to an ending balance of approximately $28.26 million in 2025-26.

c. The District's funded average daily attendance reflects a two-year decline totaling 2,390, a decrease of 11.54 percent when compared to FY 2023-24.

d. As of this response, certificated and classified labor contract negotiations for 2023-24 remain unsettled and potential changes have not been calculated and incorporated into projected salary and benefit expenditures at budget.

As of today, because of the concerns noted above, MUSD is required to submit a board-approved fiscal stabilization plan (FSP) with their first interim report; LACOE will be reviewing and commenting on MUSD's FY 23/24 1st interim report and FSP, which is due to our office by December 15th.

Although MUSD has demonstrated the ability to maintain the required level of reserves in the current and two subsequent fiscal years, we are unable to properly assess their internal controls and hiring practices, resulting in the action as being partially implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2022

In August 2022, the Los Angeles County Office of Education (LACOE) rescinded Montebello Unified School District's (MUSD) "Lack of Going Concern" designation, however concerns remain regarding the experience and knowledge of MUSD's executive business team. Due to the current chief financial officer's (CFO) unwillingness to meet with the LACOE-appointed fiscal advisor, we are unable to verify MUSD's implementation of this recommendation.

MUSD's FY 22/23 budget and Local Control Accountability Plan (LCAP) was approved by LACOE in September 2022, however the following concerns were noted which may impact their fiscal solvency:

a. Operating deficit of approximately $36.17 million for fiscal year 2022-23 and operating deficits of approximately $10.52 million for 2023-24 and $17.59 million in 2024-25.

b. The Unrestricted General Fund ending balance is projected to decrease from a beginning balance of approximately $93.09 million in 2022-2023 to an ending balance of approximately$28.81 million in 2024-25.

c. The District's funded average daily attendance reflects a two-year loss totaling 1,958, a decrease of 8.70 percent when compared to FY 2022-23.

d. Certificated and classified labor contract negotiations for 2022-23 remain unsettled and potential changes have not been calculated and incorporated into projected salary and benefit expenditures at budget adoption.

LACOE will be reviewing and commenting on MUSD's FY 22/23 1st interim report, which is due to our office by December 15th. At FY 21/22 2nd Interim, MUSD filed a positive certification, which was concurred by LACOE. We are anticipating MUSD filing a positive certification at the FY 22/23 1st interim reporting period. Because MUSD has demonstrated the ability to maintain the required level of reserves, and our inability to properly assess their internal controls, we are noting this action as partially implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2021

At the FY 20/21 Second Interim Reporting Period, the District filed a positive financial certification, to which LACOE concurred. LACOE approved the District's FY 21/22 budget. However, the District continues its "Lack of Going Concern" designation, subsequently maintaining the LACOE-appointed Fiscal Advisor. The LACOE Fiscal Advisor continues to work with the District to implement the recommendations. However, he continues to face a lack of responsiveness from the District administration. Due to continued vacancies in classified personnel, the District is unable to conduct a staffing analysis to assess possible overstaffing. In addition, the District is reluctant to curtail spending to compensate for declining enrollment. LACOE's assigned Business Services Consultant continues to monitor fiscal solvency and other budget-related matters.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2020

LACOE's Fiscal Advisor continues to work with MUSD to implement the recommendations, however he continues to face resistance from district administration, the district governing board, and the district's personnel commission. Due to key vacancies in certificated and classified personnel, the district is unable to conduct a staffing analysis to assess possible overstaffing due to refilling positions previously vacated as a result of an early retirement incentive. The district is reluctant to curtail spending to compensate for declining enrollment. LACOE's assigned Business Services Consultant continues to monitor the fiscal solvency and other budget related matters on a monthly basis. The district submitted an approvable budget and is projected to maintain a positive certification. The district is currently projecting a healthy ending fund balance and exceeds the statutory 3 percent minimum required economic reserves (REU) for fiscal years 2020-21, 2021-22 and 2022-23.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2019

The District continues to work on its action plan to address issues identified in the audit report. The budget submitted for 2019/20 was approved by LACOE. The District continues to have vacancies at key positions within the district leadership. The District has provided no clear evidence or documentation that validates they are adhering to any hiring practices. The Districts Personnel Commission and the Governing Board have been resistant to amending any hiring practice protocols and continue to block or delay the hiring of key district leadership positions. The Districts Citizens Bond Oversight Committee has been active in the past year and meets regularly to review district bond expenditures. Bond audits are current. The District has indicated they are current with filing Conflict of Interest documents (Form 700), but District could produce no validation. District expenditures approvals appear on the Board agendas and are reviewed and approved regularly by the governing board.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

While District has submitted a corrective action plan to address their budget issues, they continue to lack controls on hiring practices, ensuring adequate safeguards related to bond proceeds and other governance issues. 3 new Board members were elected in November 2018, but have not taken control of their governance. LACOE has provided additional Fiscal Expert staff to assist with addressing the concerns.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Fiscal Advisor still in place

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.

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.

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.

Annual Follow-Up Agency Response From September 2023

During FY 2022-23, LACOE concurred with MUSD's positive certifications at the 1st and 2nd interim reporting periods. LACOE is unable to evaluate MUSD's staffing levels due the scarcity of information shared by MUSD staff. However, in our FY 2023-24 Budget and LCAP approval letter, the district is reminded to "carefully monitor its enrollment and attendance trends, and adjust financial projections for the current and subsequent fiscal years accordingly to reflect the resulting impact. Staffing needs and facilities planning should also be assessed and adjusted based on the projected rate of decline in enrollment". Because of this, a response of partially implemented is noted.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2022

Since the issuance of the State Auditor's report in 2017, LACOE has been actively engaged in MUSD via a myriad of LACOE-appointed fiscal advisors and fiscal experts. In August 2022, LACOE rescinded MUSD's "Lack of Going Concern" designation, subsequently removing the LACOE-appointed fiscal advisor. The fiscal advisors worked with MUSD staff to assess student enrollment trends and to analyze staffing levels, however were unable to accurately assess staffing levels due to concerns with position control and the constant vacancies within classified and certificated personnel.

In July 2021, MUSD hired an assistant superintendent of human resources services, a position that had been vacant since 2017. The assistant superintendent has assessed staffing levels, however to our knowledge, based on the scarcity of information shared by MUSD's chief financial officer, LACOE is unable to evaluate the current staffing levels, therefore noting a response of partially implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2021

The LACOE-appointed Fiscal Advisor has provided information and attempted to meet with the Interim Assistant Superintendent of Business Services to discuss enrollment trends, staffing ratios, and other relevant factors about position control and district staffing levels. However, meetings have not happened regularly with the Interim Assistant Superintendent of Business Services.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2020

Contracts were renewed for the Assistant Superintendents of Educational Services and Educational Programs. The district unsuccessfully recruited for the position of Assistant Superintendent of Human Resources. LACOE's Fiscal Adviser recommended the use of a reputable search firm to assist with the recruitment efforts, which the district agreed to do. The district continues to employ an Interim Assistant Superintendent of Business Services. Contrary to the LACOE Fiscal Advisor's recommendation of filling the position with a Chief Business Official (CBO) or Chief Financial Officer (CFO), the governing board opted to fill the position with an Assistant Superintendent of Business Services, and requested the salary to remain the same as that of the CBO position; the governing board also requested the education and experience requirements be lowered. The district's personnel commission (PC) accepted the recommendation of the governing board to open the Assistant Superintendent of Business Services position, however the PC maintained the education and experience requirements of the CBO and lowered the salary based on their analysis of comparable districts. At a recent Personnel Commission meeting, the PC Commissioner and the PC's legal counsel stated, that it appears the governing board is making this repeated request to "dummy down" the requirements in order to accommodate somebody the board already has in mind and that is not qualified for the position. In addition, due to key vacancies in certificated and classified personnel, the district is unable to conduct a staffing analysis to assess possible overstaffing due to refilling positions previously vacated as a result of an early retirement incentive. The district continues to be reluctant to curtail spending to compensate for declining enrollment.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2019

The District has adjusted their staffing levels in consideration of the ADA levels and monitors staffing levels. The District does not have a position control system in place. They have regular monthly meetings with the district associations and have settled negotiation for 2019/20. The budget reflects the monitoring efforts they have implemented. However, the District resisted assistance by LACOE in developing a workforce plan as presented by fiscal experts assigned to the District. While they have an Interim Assistant Superintendent of Business Services, they continue to have vacancies in a key senior leadership position, Assistant Superintendent of Human Resources. Recruiting for permanent appointments have been stalled by the Personnel Commission and Governing Board.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

The district continues to maintain a positive certification. However, due to a lack of key senior management, they have not addressed ongoing staffing and workforce issues. Currently, the district does not have a Chief Business Official or Assistant Superintendent of Human Resources. LACOE has provided additional Fiscal Experts to assist district staff in addressing these issues.

California State Auditor's Assessment of 1-Year Status: Pending

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.

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.

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.

Annual Follow-Up Agency Response From September 2023

One position remains vacant on MUSD's executive cabinet, superintendent. Since the termination of the superintendent in 2021, MUSD continues to operate with an interim-superintendent, contracted through a private third-party firm; the contract term of the interim superintendent extends into FY 2023-24. The interim-superintendent previously served as the former LACOE-appointed fiscal advisor to MUSD. The District has not indicated as to when they will begin recruitment of a permanent superintendent. MUSD's Personnel Commission and the District's Governing Board are in disagreement as to the appointment of the inter-superintendent, whether he is serving as in this capacity or as the District's administrative officer, and the validity of his appointment given his lack of an administrative credential. The Personnel Commission and the District have yet to resolve these issue. Given the District has yet to indicate as to when they plan on recruiting for a permanent superintendent, our response is deemed not implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2022

One position remains vacant on MUSD's executive cabinet, superintendent. In March 2021, MUSD terminated their superintendent and entered into a two-year agreement with an interim superintendent; the interim superintendent previously served as the former LACOE-appointed fiscal advisor to MUSD. The District has not indicated as to when they expect to begin recruitment of a permanent superintendent and has extended the term of the interim superintendent for an additional year, until June 30, 2023.

Although MUSD has eliminated the position of assistant superintendent of business services and replaced the position with a chief financial officer, there are concerns as to the process by which this individual was selected and appointed to this position. Originally, this specific individual did not qualify for the position of assistant superintendent of business services because he lacked the educational and experience requirements. On Tuesday, October 5, 2021, the personnel commission discussed the potential issuance of a Notice of Violation against MUSD for the appointment of the assistant superintendent of business services. Consequently, MUSD's governing board eliminated the position and reclassified the position to chief financial officer. Although the chief financial officer's education and experience requirements were lower than that of the assistant superintendent of business services, the position saw in increase in pay and the same individual was hired into the position of chief business official. Even though the LACOE-appointed fiscal advisor requested the eligibility list, the request was ignored by MUSD's interim superintendent and the personnel commission.

All other key positions have been filled: Director Risk Management, Director Transportation Services, Director Procurement and Logistics, and Assistant Superintendent Human Resources. Because MUSD continues to employ an interim superintendent, LACOE deems this action step as partially implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2021

Two positions are vacant on the District's executive cabinet, Superintendent and Assistant Superintendent of Business Services. In March 2021, the District terminated their Superintendent and entered into a two-year agreement with an Interim Superintendent; the Interim Superintendent previously served as the former LACOE-appointed Fiscal Advisor to the District. The District has not indicated as to when they expect to begin recruitment of a permanent Superintendent.

The District continues to employ an Interim Assistant Superintendent of Business Services; the current contract with the Assistant Superintendent does not contain a "sunset clause", allowing the position to be filled indefinitely by the interim. Therefore, on Tuesday, October 5, 2021, the Personnel Commission will discuss a Notice of Potential Violation - Assistant Superintendent of Business Services.

As of this update, other key positions remain vacant, Director Risk Management, Director Transportation Services, and Director Procurement and Logistics. In addition, the three-member Personnel Commission continues to operate with two Personnel Commissioners, and an interim continues in the position of Director, Classified Personnel.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2020

The district maintains certificated and classified staffing levels similar to those of FY 19/20. The district has yet to hire an Assistant Superintendent of Human Resources and is currently without a Director of Classified Personnel, subsequently delaying the implementation of a study of its workforce; the district has contracted with a consultant to study it's Nutrition Services department. Contracts were renewed for the Assistant Superintendents of Educational Services and Educational Programs. Salary ranges are comparable to that of similar size districts. The district is in contentious negotiations with CSEA. LACOE has recommended Montebello cease placing certificated administrators on special assignments in classified administrative positions, which the district has begun to implement. Due to key vacancies in certificated and classified personnel, the district is unable to conduct a staffing analysis to assess possible overstaffing due to refilling positions previously vacated as a result of an early retirement incentive. The district continues to be reluctant to curtail spending to compensate for declining enrollment.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2019

The District has made permanent appointments for the Assistant Superintendent, Educational Services and Assistant Superintendent of Student Services. They have appointed an Interim Assistant Superintendent of Business Services and still have a vacancy for the Assistant Superintendent of Human Resources. The District Superintendent oversees the human resources function and many business services functions. Executive salaries have not been adjusted with one exception. The salary for the Assistant Superintendent of Business Services was adjusted downward. The District Personnel Commission and Governing Board have been resistant to filling senior leadership vacancies.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

While the district has evaluated various executive positions within the district, key positions remain vacant and the previous governing board prevented the district from hiring key personnel. LACOE has provided the district with additional fiscal expert assistance to address these issues.

California State Auditor's Assessment of 1-Year Status: Pending

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.

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.

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.

Annual Follow-Up Agency Response From September 2023

MUSD has filed a positive certification at the FY 22/23 1st and 2nd interim periods, and although severely deficit spending, has indicated in their FY 23/24 budget submission, they will meet the required reserve amounts of 3 percent in the current and subsequent two fiscal years, demonstrating they have regained and continue to maintain a positive certification. A better financial position of MUSD will be known after the FY 23/24 1st Interim period. As previously noted, MUSD has been directed to submit a board-approved fiscal stabilization plan in an effort to curtail their projected level of deficit spending.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2022

As stated in the above responses, MUSD has filed a positive certification at the FY 21/22 2nd interim period, and although severely deficit spending, has indicated in their FY 22/23 budget submission that they will meet the required reserve amounts of 3 percent in the current and subsequent two out years, demonstrating they have regained and continue to maintain a positive certification. A better financial position of MUSD will be known after the FY 22/23 1st Interim period.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2021

The District continues to work on its action plan to address the issues identified in the audit report. However, due to the COVID-19 pandemic, the District has focused on the reopening of schools. District expenditures appear on the Board agenda and are reviewed by the LACOE Fiscal Advisor. The vacancies and appointments of Interim Superintendent and Interim Assistant Superintendent of Business Services hinder the District's progress towards fully implementing the recommendations.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2020

The district continues to work on its action plan to address issues identified in the audit report. In April 2020, the district contracted consultants to provide ongoing training to the governing board and to assist district personnel with bond oversight functions. A study session was held during a regular meeting of the district's governing board. The district's unwillingness to permanently fill the vacancy of the Assistant Superintendent of Business Services has caused LACOE to suspend Montebello's efforts to refinance the sale of general obligation bonds and to cease negotiations on the sale/development/ lease of surplus property. Although Bond audits are current, the Citizens Bond Oversight Committee has not met sense October 2019. District expenditure approvals appear on the Board agenda and are reviewed in advance by the LACOE Fiscal Expert. Questionable expenditures are requested to be pulled from the agenda and discussed prior to being presented to the governing board for approval at a later meeting.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2019

The District continues work on implementation of the recommendations. LACOE's Fiscal Advisor and Fiscal Expert Team has been working with the District to implement the recommendations. However, they have been met with resistance in working with district staff. Main obstacle continues to be the Governing Board and District Superintendent. On October 16, 2019, the District presented an update to the Governing Board on recommendations related to the Adult School Program. LACOE cannot validate the recommendations had been implemented. In November 2019, the District will present to the Governing Board updates on the financial and bond activity recommendations. An update on human resources related recommendation has not been scheduled

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

The district has not implemented all recommendations detailed in the report. The previous governing board has prevented the district from addressing all the recommendations. LACOE has provided additional fiscal experts to assist with addressing the recommendations within the detailed report.

California State Auditor's Assessment of 1-Year Status: Pending

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

MUSD reviews both its student enrollment and staffing based on program and student needs. The multi-year projections will continue to demonstrate a positive certification and position control continues to be closely monitored.

The District is working with the newly appointed Interim Superintendent in finalizing the fiscal stabilization plan. However, the District had received a significant amount of COVID-19 stimulus funds. As part of the requirements of the use of funds, no significant cuts to an existing workforce was permitted. We anticipate through attrition and a possible early retirement incentive to reduce a significant number of personnel.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide documentation to support that it fully implemented this recommendation. Further, in its response to Recommendation #1, the Los Angeles County Office of Education indicated that there continue to be concerns over Montebello's ability to meet its financial obligations. It also stated that Montebello is reluctant to curtail spending to compensate for declining enrollment.

Annual Follow-Up Agency Response From October 2020

MUSD reviews both its student enrollment and staffing based on program and student needs. The multi-year projections will continue to demonstrate a positive certification and position control continues to be closely monitored.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

According to the Los Angeles County Office of Education, Montebello is reluctant to curtail spending to compensate for declining enrollment. In addition, Montebello's multi-year projections from its 2020-21 budget shows its general fund expenditures are expected to exceed its revenue from 2020-21 through 2022-23.

Annual Follow-Up Agency Response From October 2019

MUSD continues to review both its student enrollment and staffing based on program and student needs. There has been a reduction based on the staffing standard. The multi-year projections will continue to demonstrate a positive certification and position control will be closely monitored.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has made necessary cuts to fund its ongoing commitments. Montebello's documentation shows that it has a deficiency of revenues over expenditures in its multi-year projections.

1-Year Agency Response

MUSD continues reviewing its student enrollment and monitoring staffing based on program and student needs. The multi-year projections will continue to demonstrate a positive certification and position control will be closely monitored as well as ensuring that supplemental and concentration monies are utilized to enhance programs and the delivery of services to our students.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello has not demonstrated that it has made necessary cuts to fund its ongoing commitments. Montebello's Budget Adoption Narrative and Fiscal Stabilization Plan dated June 27, 2018 shows that it has a deficiency of revenues over expenditures in its multi-year projections. This trend may not be sustainable.

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.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

The district has developed a robust automated process to aid in budget development and monitoring and has maintained the required level of reserves since the state audit of 2016.

Schools and departments have up-to-date budget worksheets that are maintained on a Google drive. The worksheets are updated daily and include detailed listings of account activity by account string. Finance personnel regularly collaborates with Administrators on budget development and monitoring to ensure that district priorities are being met.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

According to an August 2023 letter from the Los Angeles County Office of Education (LACOE), LACOE remains extremely concerned about the projected trend of deficit spending and its impact on the district's ability to maintain minimum required reserves in future years. Montebello's budgeting practices should address this deficit spending concern by ensuring that actual amount spent does not exceed budgeted amounts.

Annual Follow-Up Agency Response From October 2021

MUSD has established a robust budgeting process to determine necessary reductions and to ensure it maintains the required level of reserves. Furthermore, on August 5, 2021 for the fourth consecutive year, district and school leadership hosted the Leadership Colloquium to review allowable and non-allowable district expenditures with Administrators and Managers. MUSD is utilizing the Government Finance Officers Association's budget monitoring to guide our budgeting process.

The District follows the California Department of Education (CDE) timelines and submits the budget to the Los Angeles County Office of Education (CDE) prior to July 1st of each year, submits quarterly Interim Reports in December and March, and Estimated Actuals by July.

As of June 30, 2021, the District had a reserve of approximately $88 million, of which approximately $12 million was needed to meet the minimum 3% required Reserve for Economic Uncertainties.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

A January 2021 report by the Fiscal Crisis and Management Assistance Team (FCMAT) indicated that Montebello is at high risk of insolvency. FCMAT stated that the loss of revenue due to the year-over-year enrollment decline is of significant concern, which the district projects will continue into the subsequent fiscal years. It added that the erosion of the unrestricted general fund ending balance because of ongoing deficit spending is also an area of concern. In addition, FCMAT cited Montebello's budget development and monitoring as significant risk factors. Until Montebello creates a budgeting process that addresses these risks, this recommendation would not be fully implemented.

Annual Follow-Up Agency Response From October 2020

MUSD has established a robust budgeting process to determine necessary reductions and to ensure it maintains the required level of reserves. Furthermore, on August 4, 2020, for the third consecutive year, district and school leadership hosted the Fiscal Crisis and Management Assistance Team to review allowable and non-allowable district expenditures. MUSD is utilizing the Government Finance Officers Association's budget monitoring to guide our budgeting process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

According to the Los Angeles County Office of Education (LACOE), Montebello is currently projecting a healthy ending fund balance and exceeds the statutory 3 percent minimum required economic reserves (REU) for fiscal years 2020-21, 2021-22 and 2022-23. However, Montebello's multi-year projections from its 2020-21 budget shows its general fund expenditures are expected to exceed its revenue from 2020-21 through 2022-23--resulting in a declining fund balance. LACOE further notes that Montebello is reluctant to curtail spending to compensate for declining enrollment.

Annual Follow-Up Agency Response From October 2019

MUSD continues to work closely with the Los Angeles County Office of Education to establish a robust budgeting process to determine necessary reductions and to ensure it maintains the required level of reserves. Furthermore, on August 8, 2019 district and school leadership hosted a second annual Fiscal Crisis and Management Assistance Team to review allowable and non-allowable district expenditures. MUSD is utilizing the Government Finance Officers Association's budget monitoring to guide our budgeting process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has fully implemented our recommendation. Montebello's documentation shows that it has a deficiency of revenues over expenditures in its multi-year projections.

1-Year Agency Response

MUSD has worked closely with the Los Angeles County Office of Education to establish a robust budgeting process that ensures maintaining the required level of reserves while it continues to provide and enhance education programs for the students it serves. Furthermore, on August 9, 2018 district and school leadership hosted the Fiscal Crisis and Management Assistance Team to review allowable and non-allowable district expenditures. MUSD is utilizing the Government Finance Officers Association's budget monitoring to guide our budgeting process.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello had not demonstrated that it has fully implemented our recommendation. It used one-time transfers to help meet certain obligations, but its approved budget projects deficit spending in the two subsequent years.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

The district has developed a robust automated process to aid in budget development and monitoring and has maintained the required level of reserves since the state audit of 2016.

Schools and departments have up-to-date budget worksheets that are maintained on a Google drive. The worksheets are updated daily and include detailed listings of account activity by account string. Finance personnel regularly collaborates with Administrators on budget development and monitoring to ensure that district priorities are being met.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

According to an August 2023 letter from the Los Angeles County Office of Education (LACOE), LACOE remains extremely concerned about the projected trend of deficit spending and its impact on the district's ability to maintain minimum required reserves in future years. Montebello's budgeting practices should address this deficit spending concern by ensuring that actual amount spent does not exceed budgeted amounts.

Annual Follow-Up Agency Response From October 2021

MUSD has made significant changes to make financial reports more transparent. All account numbers have been changed to match the Goals in the LCAP plan. All of the individual school and program budgets are shared with personnel so budgets can be reviewed in real time. Furthermore, the Actuals to Budget spreadsheet is given to the accountants on a weekly basis to assist them in reconciling their programs.

In Fiscal Year 2020-2021, the District created user friendly Google spreadsheets for all schools and departments. This detailed report list updated daily and list all documents that have been processed through Fiscal Services.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show that the budget manager performs monthly reviews of budget-to-actual figures and provides detailed explanations to the board for any variances.

Further, a January 2021 report by the Fiscal Crisis and Management Assistance Team (FCMAT) indicated that Montebello is at high risk of insolvency. FCMAT stated that the loss of revenue due to the year-over-year enrollment decline is of significant concern, which the district projects will continue into the subsequent fiscal years. It added that the erosion of the unrestricted general fund ending balance because of ongoing deficit spending is also an area of concern. In addition, FCMAT cited Montebello's budget development and monitoring as significant risk factors.

Annual Follow-Up Agency Response From October 2020

MUSD has made significant changes to make financial reports more transparent. All account numbers have been changed to match the Goals in the LCAP plan. All of the individual school and program budgets are shared with personnel so budgets can be reviewed in real time. Furthermore, the Actuals to Budget spreadsheet is given to the Accountants on a weekly basis to assist them in reconciling their programs.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show that the budget manager performs monthly reviews of budget-to-actual figures and provides detailed explanations to the board for any variances. Further, Montebello's multi-year projections from its 2020-21 budget shows its general fund expenditures are expected to exceed its revenue from 2020-21 through 2022-23.

Annual Follow-Up Agency Response From October 2019

MUSD continually reviews and refine its processes to ensure that spending does not exceed budgeted expenditures. The Interim Assistant Superintendent, Business Services monitors and works with staff to ensure monthly reviews continue to occur.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show that the budget manager performs monthly reviews of budget-to-actual figures and provide detailed explanations to the board for any variances. Montebello's documentation shows that it has a deficiency of revenues over expenditures in its multi-year projections.

1-Year Agency Response

MUSD continues to refine its processes to ensure that spending does not exceed budgeted expenditures. The Director of Fiscal Services monitors and works with staff to ensure monthly reviews continue to occur.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello had not demonstrated that it has fully implemented our recommendation. It used one-time transfers to meet certain obligations, but its approved budget projects deficit spending in the two subsequent years.

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.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

The district has fully staffed its executive personnel and management staff through Human Resources following district recruiting and hiring policies and practices.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has adhered to its policies for hiring classified employees. Further, Montebello did not provide evidence to show that it screened candidates to ensure that they meet the minimum qualifications or that it interviewed and ranked candidates.

Annual Follow-Up Agency Response From October 2021

To ensure that the Montebello Unified School District hires the most qualified executive and management staff, the Personnel Commission has started a review of job classifications, updates job specifications, and increased the level of scrutiny to ensure compliance with the Personnel Commission's existing rules and regulations. The Personnel Commission is also adjusting and improving rules. With respect to applicants meeting the minimum qualifications, personnel commission staff conduct rigorous screening measures, check, validate, and verify information, and prepare and certify eligibility lists. The Personnel Commission not only pre-screens provisional employees to ensure they meet the qualification, the PC also now places them on public agenda inviting comments and objections, if any. The former director did not adhere to these policies.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has adhered to its policies for hiring classified employees. Further, Montebello did not provide evidence to show that it screened candidates to ensure that they meet the minimum qualifications or that it interviewed and ranked candidates.

Annual Follow-Up Agency Response From October 2020

MUSD continues to follow its policies in hiring the most qualified classified employees and ensuring they meet minimum qualifications. This policy also includes provisional employees. MUSD advertises vacant positions inside and outside of the district. Postings include Maintenance Manager, and Payroll & Benefits Manager. Documentation showing the complete process has been submitted for the positions filled.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has adhered to its policies for hiring classified employees. The documentation Montebello provided is incomplete and does not show that it followed its hiring processes. Montebello did not provide evidence to show that it screened candidates to ensure that they meet the minimum qualifications or that it interviewed and ranked candidates.

Annual Follow-Up Agency Response From October 2019

MUSD continues to follow its policies in hiring the most qualified classified employees and ensuring they meet minimum qualifications. This policy also includes provisional employees. MUSD advertises vacant positions inside and outside of the district. Postings include Directors Fiscal Services, Maintenance, Operations and Facilities Development, Procurement & Logistics, and Transportation. Documentation showing the complete process has been submitted for the positions filled.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it has adhered to its policies for hiring classified employees. The documentation Montebello provided is incomplete and does not show that it followed its hiring processes. Montebello did not provide evidence to show that it screened candidates to ensure that they meet the minimum qualifications or that it interviewed and ranked candidates.

1-Year Agency Response

MUSD continues to hire the most qualified classified employees by ensuring they meet the minimum qualifications. MUSD also continues to advertise vacant positions inside and outside of MUSD. Postings include Chief Business Officer, Director of Fiscal Services and Director of Maintenance, Operations and Facilities Development. Documentation showing the complete process from beginning to end has been submitted for the positions filled.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello has not provided sufficient evidence to demonstrate that it followed the policies for hiring classified employees. Specifically, Montebello did not provide support that it filled the positions for the Chief Business Officer and the two director positions. Further, Montebello did not demonstrate how candidates met minimum qualifications.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

The Personnel Commission and the Provisional Director are revising rules to improve accountability, oversight, and transparency. Existing policies are sound, the enforcement of rules and regulations is heightened by ensuring compliance with existing procedures. The Director provides a list of all provisional appointments and ensure they meet minimum qualifications.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not addressed our recommendation. It has not demonstrated that the personnel commission revised its policies to require the classified director to provide the education and work experience of candidates on the eligibility lists for high-ranking positions.

Further, in its response to Recommendation #3, the Los Angeles County Office of Education noted concerns with the district appointing the Interim Assistant Superintendent of Business Services without a "sunset clause", allowing the position to be filled indefinitely by the interim.

Annual Follow-Up Agency Response From October 2020

MUSD's personnel commission has revised its policy where the classified director provides the education and work experience of candidates for high-ranking positions, including provisional appointments. Documentation showing how the employees meet the minimum requirements is included.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not addressed our recommendation. It has not demonstrated that the personnel commission revised its policies to require the classified director to provide the education and work experience of candidates on the eligibility lists for high-ranking positions.

Further, in its response to Recommendation #2, the Los Angeles County Office of Education noted concerns with the district's attempts to fill the Assistant Superintendent of Business Services.

Annual Follow-Up Agency Response From October 2019

MUSD's personnel commission has revised its policy where the classified director is to provide the education and work experience of candidates for high-ranking positions, including provisional appointments. Documentation showing how the employees meet the minimum requirements is included.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not addressed our recommendation. It has not demonstrated that the personnel commission revised its policies to require the classified director to provide the education and work experience of candidates on the eligibility lists for high-ranking positions. Further, Montebello's list of provisional appointments does not include information on how those employees meet the minimum qualifications.

1-Year Agency Response

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

California State Auditor's Assessment of 1-Year Status: Pending

Montebello has not addressed our recommendation. It has not demonstrated that the personnel commission revised its policies or that the classified director provides the education and work experience of any candidates on the eligibility lists for high-ranking positions. Further, Montebello's list of provisional appointments it asserts it provides to the personnel commission does not include 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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

The Director of Classified Personnel (Provisional) monitors the dates of appointment and dates of termination and provides reports to the Personnel Commission. Initial appointments may not exceed 90 working days per year. The Director of Classified Personnel (Provisional) may approve extensions for a period not to exceed thirty-six additional working days as permitted in Rule 7.2.3.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it adhered to its policies to ensure that provisional employees do not work more than the legal maximum number of days of service.

Further, in its response to Recommendation #3, the Los Angeles County Office of Education noted concerns that the district's current contract with the Interim Assistant Superintendent of Business Services does not contain a "sunset clause", allowing the position to be filled indefinitely by the interim.

Annual Follow-Up Agency Response From October 2020

MUSD ensures that provisional employees do not exceed the legal maximum number of days of service. Personnel forms show date ending provisional employment.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it adhered to its policies to ensure that provisional employees do not work more than the legal maximum number of days of service. The documentation Montebello provided does not demonstrate that it adhered to the end date stated on its list of provisional employees, such as a letter ending the provisional appointment.

Annual Follow-Up Agency Response From October 2019

MUSD will continue to ensure that provisional employees do not exceed the legal maximum number of days of service. Documentation showing provisional employees with end date is included.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it adhered to its policies to ensure that provisional employees do not work more than the legal maximum number of days of service. The documentation Montebello provided does not demonstrate that it adhered to the end date stated on its list of provisional employees, such as a letter ending the provisional appointment.

1-Year 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.

California State Auditor's Assessment of 1-Year 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.

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.

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.

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.

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.

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.

1-Year Agency Response

MUSD fulfilled this recommendation on March 2, 2018 when the Interim Assistant Superintendent of Educational Services was presented for Board Approval. The Interim Assistant Superintendent of Educational Services holds both a teaching and administrative services credential.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

To the extent Montebello continues to verify this information before it appoints individuals to these positions, Montebello addresses our recommendation.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

Montebello Unified School District (aka 'District') adopts a standardized process in attracting, interviewing, vetting, and selecting qualified applicants using an online based application service managed by the San Joaquin County Office of Education called EdJoin (Edjoin.com). Edjoin is the standard by which the 58 counties in California post educational vacancy openings in a manner that is equitable, clear, and transparent in the expectations of individual applicants. This approach applies whether they be for executive level positions, or other certificated/classified non-administrative positions. Once a vacancy has been determined by the District, a posting is made on EdJoin that becomes available on the internet for any and all applicants who wish to apply within a given posted deadline of not less than one week, more typically 2-4 weeks, for a given position. The length of time is given based on the market saturation of applicants based on the applicant pool found within EdJoin for applicant submissions who make their applications available for LEA public review.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Montebello provided an example of a hiring that showed how it advertised for the position, and screened and interviewed the candidates. To the extent that Montebello adheres to its policies for hiring certificated personnel through a competitive hiring process, it will address our recommendation.

Annual Follow-Up Agency Response From October 2021

MUSD has hired personnel following a competitive hiring process, including advertising, screening to ensure minimum qualifications were met and interviewing the candidates. MUSD followed these steps for Assistant Superintendent, Educational Services, Assistant Superintendent, Educational Services, and Assistant Superintendent, Human Resources. Positions were posted and advertised both inside and outside the district. Supporting documentation is included outlining the process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not demonstrate that it adhered to its policies for hiring certificated personnel. It did not provide documentation to show it filled vacant positions for executives through a competitive hiring process.

Annual Follow-Up Agency Response From October 2020

MUSD has hired personnel following a competitive hiring process, including advertising, screening to ensure minimum qualifications were met and interviewing the candidates. MUSD followed these steps for Assistant Superintendent, Educational Services, Assistant Superintendent, Educational Services, and Assistant Superintendent, Human Resources. Positions were posted and advertised both inside and outside the district. Supporting documentation is included outlining the process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not demonstrate that it adhered to its policies for hiring certificated personnel. It did not provide documentation to show it filled vacant positions for executives through a competitive hiring process.

Annual Follow-Up Agency Response From October 2019

MUSD has hired personnel following a competitive hiring process, including advertising, screening to ensure minimum qualifications were met and interviewing the candidates. MUSD followed these steps for Assistant Superintendent, Educational Services, Assistant Superintendent, Educational Services and Directors of Educational Services, Federal and State Programs, Human Resources, Special Education, and Student Services. Positions were posted and advertised both inside and outside the district. Supporting documentation is included outlining the process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not demonstrate that it adhered to its policies for hiring certificated personnel. It did not provide documentation to show it filled vacant positions for executives through a competitive hiring process.

1-Year Agency Response

MUSD has hired a permanent Superintendent and followed a competitive hiring process, including advertising, screening to ensure minimum qualifications were met and interviewing the candidates. MUSD also followed the steps for Director of Educational Services, Director of Certificated Human Resources, Principal-Elementary (2). Position were posted and advertised both inside and outside the district. Supporting documentation is included outlining the processes from beginning to end.

California State Auditor's Assessment of 1-Year Status: Pending

The permanent superintendent that Montebello hired was not an applicant, and thus was not hired as part of the competitive hiring process. Further, Montebello did not provide support that it hired any of the candidates that it screened or interviewed.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

If the District creates positions, or follows the recommendation of the Personnel Commission to ensure compliance with rules, such positions are reviewed in advance, the job specifications are modified or updated, and this process is backed up by memoranda published and ultimately approved by the Personnel Commission and Board of Education. Personnel Commission dates and retains memoranda, notes changes in specifications and records them, and attempts to eliminate ambiguities and overlap in duties and responsibilities. Each position is filed electronically and dated.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it updated its policy to require a justification for why the district is creating a position.

Annual Follow-Up Agency Response From October 2020

MUSD has updated its policies to justify the creation of new positions and will continue to document its justification on personnel request & authorization forms as well as personnel requisition forms.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not updated its policy to require a justification for why the district is creating a position.

Annual Follow-Up Agency Response From October 2019

MUSD provides the Board of Education with written justification on why a position is being created as demonstrated by the documentation submitted. MUSD will continue to document its justification on personnel request & authorization forms as well as personnel requisition forms.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not updated its policy to require a justification for why the district is creating a position.

1-Year Agency Response

MUSD will provide the Board of Education with written justification on why a position is being created as demonstrated by the recommendation on the Board agenda. MUSD will continue to document its justification on the personnel requisition forms.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello has not implemented our recommendation. It did not establish a policy that requires a justification for why the district is creating a position. Further, Montebello has not demonstrated that it records a justification for creating new positions on its personnel requisition forms.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

Upon closing of an executive level vacancy posting, the applicant pool is screened against the posted requirements for completeness and adherence to, not only District requirements, but also State and Federal requirements for a legal right to work in the capacity advertised.

For a given executive level position, upon successful screening, applicants are contacted for interview rounds in succession whereby District stakeholder reviewers conduct in-person vetting of submissions. Second round interviews, scheduled as needed, are then conducted typically with cabinet members for final selection with an offer to the successful candidate after successful reference checks. Upon acceptance, the successful candidate undergoes onboarding which includes, but is not limited to, background checks, communicable disease clearance, and conformational acquisition of any required documents from independent third parties (e.g., universities for transcripts) to support the candidate's selection. Upon successful onboarding, the candidate is presented for Board review and approval before work begins for the original posted vacancy.

Board Policy 4111 (a) provides that for each position, the Superintendent or designee shall present to the Board one candidate who meets all qualifications established by law and the Board for the position. No person shall be employed by the Board without the recommendation or endorsement of the Superintendent or designee.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not provided evidence that it updated its policy to address the specific elements of our recommendation. For example, its current policy does not require the board to consider the number of initial applicants, the number of candidates who passed the screening and interviewing steps, and the education and work experience of the final candidate recommended by the superintendent or designee before hiring high-ranking employees.

Annual Follow-Up Agency Response From October 2021

MUSD continues to refine its policies for hiring high ranking officials.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not demonstrated that it updated its policies to require the superintendent or his or her designee to provide information to the board about recruitments for high-ranking employees.

Annual Follow-Up Agency Response From October 2020

MUSD continues to update its policies for hiring high ranking officials.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not updated its policies to require the superintendent or his or her designee to provide information to the board about recruitments for high-ranking employees.

Annual Follow-Up Agency Response From October 2019

MUSD continues providing the Board of Education with a candidate selection process summary. The information includes the number of initial applicants, number of applicants who passed screening, number of candidates interviewed and interview steps, and the education and work experience of the final candidate who is recommended by the Superintendent.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello has not updated its policies to require the superintendent or his or her designee to provide information to the board about recruitments for high-ranking employees. It has not provided evidence that it provides the Board of Education with the work experience of the final candidate who is recommended by the superintendent or designee.

1-Year Agency Response

MUSD continues providing the Board of Education with information of the hiring process to include number of applicants, number of applicants who passed screening, number of candidates interviewed, and the education and work experience of the final candidate. MUSD is in the process of formalizing a policy that will provide the minimum recommended information.

California State Auditor's Assessment of 1-Year Status: Pending

Per Montebello's response, it is in the process of formalizing a policy. We will assess Montebello's actions to implement this recommendation once it revises the policy.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2023

The Montebello Unified School District has an existing Board Policy regarding the Employment of Relatives, which was revised on April 19, 2018, per the recommendations of the state auditors, that it closely adheres to, in all recruitment and selection processes. The Interviewer's Responsibility for Confidentiality and Disclosures regarding Board Policy 4112.8, 4212.8, 4312.8 form has been updated for panel members to attest any potential conflicts of interest with candidates and or panel members and to ensure confidentiality in the interview process. The updated policy provides:

The Governing Board desires to maximize staff and community confidence in district hiring, promotion, and other employment decisions by promoting practices that are free of conflicts of interest or the appearance of impropriety. The Board prohibits the appointment of any person to a position for which his/her relative or cohabitant maintains management, supervisory, evaluation, or promotion responsibilities and prohibits an employee from participating in any decision that singularly applies to any of his/her relatives. This includes relatives of the Governing Board Members, Executive Cabinet, Directors, Assistant Directors, Principals, Assistant Principals, managers, and supervisors. This Board Policy also defines what types of relationships fall under nepotism and conflict of interest and how to address any violations in a timely way.

Furthermore, to address this portion of the recommendation, all Human Resources technical personnel have been trained to recognize and address any nepotism or conflicts of interest in the recruitment and hiring process.

California State Auditor's Assessment of Annual Follow-Up 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.

Annual Follow-Up Agency Response From October 2021

MUSD has a policy that was revised and approved by the Board for employment of relatives, which addresses nepotism, conflicts of interest and personal relationships.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show it revised its hiring policies related to nepotism to establish 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.

Annual Follow-Up Agency Response From October 2020

MUSD has a policy that was revised and approved by the Board for employment of relatives, which addresses nepotism, conflicts of interest and personal relationships.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show it revised its hiring policies related to nepotism to establish 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.

Annual Follow-Up Agency Response From October 2019

MUSD has a policy that was revised and approved by the Board for employment of relatives, which addresses nepotism, conflicts of interest, and personal relationships.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence to show it revised its hiring policies related to nepotism to establish 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.

1-Year Agency Response

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

California State Auditor's Assessment of 1-Year Status: Pending

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.

6-Month Agency Response

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

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.

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.

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:

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2019

MUSD requires its contracted program manager to provide a detailed bond expenditure report for Measure GS to the Citizens' Bond Oversight Committee.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

MUSD's contracted program manager provided a detailed bond expenditure reports for Measure GS.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello did not provide evidence that the contents and details within such reports were defined and agreed upon by the contracted project manager's staff and Montebello. Further, Montebello has not demonstrated that it requires its contracted project manager to provide the bond committee with detailed bond expenditures for all relevant bonds at least biannually.

6-Month Agency Response

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

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 .

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.

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.

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.

Annual Follow-Up Agency Response From October 2020

MUSD has completed the bond audit and continues to address the auditor's concerns and recommendations.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Montebello provided the bond audit reports for Measure EE, Measure GS, and Measure M for fiscal year 2018-19. The reports indicated that Montebello generally addressed the auditor's recommendations. Further, in its response to recommendation #4, the Los Angeles County Office of Education indicated that bond audits are current. To the extent that Montebello continues to obtain timely bond audits and address the bond auditor's concerns, it will have implemented our recommendation.

Annual Follow-Up Agency Response From October 2019

MUSD has completed the bond audit and continues to address the auditor's concerns and recommendations.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

The bond audit reports for both Measure M and GS identified significant deficiencies in payroll accounting and segregation of duties/employee turnover. Montebello should address the auditor's concerns and recommendations.

1-Year Agency Response

MUSD has completed the bond audit and continues to address the recommendations.

California State Auditor's Assessment of 1-Year Status: Pending

The bond audits for fiscal years 2015-16 and 2016-17 contained findings and recommendations. Montebello should address the auditor's concerns and recommendations.

6-Month Agency Response

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

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.

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.

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.

1-Year Agency Response

MUSD has updated its conflict of interest policy to include the positions of the hazardous materials coordinator and facilities projects coordinator.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

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

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

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.

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.

Annual Follow-Up Agency Response From October 2019

Designated employees, including members of the Citizens' Bond Oversight Committee, have filed statements of economic interests as required by the bylaws.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

If Montebello continues to require designated employees to file statements of economic interests, it will implement our recommendation.

1-Year Agency Response

MUSD has filed statements of economic interests from designated employees including all board members. Forms are filed in the Superintendent's Office and those required to be filed with the L.A. County Supervisors have been sent.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello has not demonstrated that designated employees, such as members of the citizens' bond oversight committee, filed statements of economic interests, as required in its bylaws.

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.

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.

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

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

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

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.

1-Year Agency Response

MUSD has updated its conflict of interest policy to include the hazardous materials coordinator and facilities projects coordinator. MUSD has filed statements of economic interests from designated employees including all board members. Forms are filed in the Superintendent's Office and those required to be filed with the L.A. County Supervisors have been sent.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Montebello expanded its policy to require additional positions 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.

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.

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

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.

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.

Annual Follow-Up Agency Response From October 2020

MUSD employees are required to fill out detailed timesheets that demonstrate the hours worked related to bond activities. The percentage of the salary that is paid by bond proceeds is reflected on the timesheets. This is tracked via the time accounting process.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Montebello's bond audits as of June 30, 2019 report that beginning November 2018 the district began using proper time accounting procedures that is based on actual work performed. To the extent that Montebello continues to use proper timekeeping practices, it will have addressed our recommendation.

Annual Follow-Up Agency Response From October 2019

MUSD employees are required to fill out detailed timesheets that demonstrate the hours worked related to bond activities. Only a portion of the salary is paid by bond proceeds and it is tracked via a time accounting process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

The bond audits for both Measure GS and Measure M note deficiencies related to payroll accounting and recommend that Montebello ensure that wages charged to the building fund be substantiated based on actual work performed on bond projects. Montebello should resolve the recommendations and demonstrate to us that it consistently requires employees to fill out detailed timesheets.

1-Year Agency Response

MUSD continues to work on identifying the positions that need funding source changed. Once identified, personnel requisition forms are generated to change the funding source. Meetings continue to take place to discuss the process between Maintenance, Operations and Facilities and the Finance Department. Documentation is included demonstrating the changes.

California State Auditor's Assessment of 1-Year Status: Pending

Bond proceeds should only be used to pay the portion of the salary relating to bond-funded activities that is supported by the timesheet. Montebello has not provided evidence that staff fill out detailed timesheets to demonstrate that they work on bond-related activities.

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

MUSD has an agreement for an inventory tracking system through Escape Technology, which was subsequently purchased by Frontline Education. Fiscal year 2020-21 was the first year that this system was implemented. MUSD will review its inventory and implement site visits to ensure it is being used properly.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Montebello provided an inventory tracking sheet. Recommendation will be kept open pending evidence of site visits to ensure that equipment is being used properly.

Annual Follow-Up Agency Response From October 2020

MUSD has and agreement for an inventory tracking system through Escape Technology. MUSD will review its inventory to ensure it is being used properly once set up is complete.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2019

MUSD has implemented an inventory tracking system through Escape Technology for departmental finance purchasing and fixed assets. MUSD also continues to periodically review its inventory to ensure it is being used properly.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello provided the agreement with Escape Technology to provide software for purchasing and fixed assets. Montebello did not provide evidence that shows it implemented the system or that the software allows staff to know where its equipment is located. It did not provide evidence to show that it periodically reviews its inventory to ensure that equipment is being properly used.

1-Year Agency Response

At this time MUSD is maintain inventory as demonstrated by the attached report.

California State Auditor's Assessment of 1-Year Status: Pending

We will keep this recommendation open until Montebello demonstrates that it periodically reviews 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.

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.

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.

1-Year Agency Response

MUSD has closed the Adult Education revolving fund account. Documentation is included to reflect the closure.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

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

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.

60-Day Agency Response

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

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.

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.

Annual Follow-Up Agency Response From October 2020

MUSD continues to require employees to obtain approval for overtime prior to performing any overtime work. Additionally, employees are required to submit an explanation of tasks completed during overtime work.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Montebello provided examples of approvals for overtime, which include work description and justification. To the extent that Montebello consistently follows this process for all employees, it would have addressed our recommendation.

Annual Follow-Up Agency Response From October 2019

MUSD requires all employees to obtain approval for overtime before performing any overtime work. Additionally, employees are required to submit an explanation of tasks completed during overtime work.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Montebello did not provide evidence that shows employees submit overtime requests or the explanation of tasks completed during overtime work.

1-Year Agency Response

MUSD has a process in place whereby overtime approval is required prior to work being performed to include justification of the services being performed as evidenced by the supporting documentation.

California State Auditor's Assessment of 1-Year Status: Pending

Montebello's support does not demonstrate that employees submit an explanation of tasks they completed during their overtime or why they needed to work overtime.

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.

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.

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.

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.

1-Year Agency Response

MUSD requires receipts for purchases made with purchase cards. Documentation is included.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Montebello provided examples of instances it obtained receipts for purchases made with purchase cards.

To the extent Montebello obtains and reviews receipts to ensure that all purchases were for allowable and reasonable purposes, it will implement our recommendation.

6-Month Agency Response

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

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2021

MUSD has created a fiscal annual report identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student. The report was be submitted to the Board of Education in December 2018, October 2019 and December 2020. The report was submitted to the Los Angeles Regional Adult Education Consortium in December 2018 and December 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Montebello Unified School District reported the required information to the Board of Education and the Los Angeles Regional Adult Education Consortium. To the extent that Montebello annually reports this information to the consortium and the board, and it ensures that the information is accurate, it would address this recommendation.

Annual Follow-Up Agency Response From October 2020

MUSD has created a fiscal annual report identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student. The report was be submitted to the Board of Education in December 2018 and October 2019. The report was submitted to the Los Angeles Regional Adult Education Consortium in December 2018.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

This recommendation is partially implemented because in 2019 the adult program only reported to the Board of Education and not to the consortium, which provides key oversight over adult education. The adult program plans to report the recommended information to both the Board of Education and the consortium in December 2020.

Annual Follow-Up Agency Response From October 2019

MUSD has created a fiscal annual report identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student. The report was submitted to the Board of Education in December 2018 and October 2019.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Although Montebello provided evidence to show it provided the Board of Education with a presentation on adult education expenditures in October 2019, it did not provide evidence to demonstrate it provided this information to the consortium, which provides key oversight over adult education.

1-Year Agency Response

MUSD has created a fiscal annual report (July 1 - June 30) identifying the number of students in each class, the number of hours taught by each teacher, and the cost of the class per student. The report will be submitted to the Board of Education in the month of December.

California State Auditor's Assessment of 1-Year Status: Pending

Per Montebello's response, it has not submitted the report to the board of education. We will assess Montebello's implementation of this recommendation once Montebello demonstrates that it provides this information to the consortium and the board annually.

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.

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.

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.

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.

Annual Follow-Up Agency Response From October 2022

Montebello USD Adult Education has reported to the consortium swift actions to address the Adult Education Recommendations noted on the November 2017 MUSD audit report. Additionally, in summary, Montebello USD returned to the consortium one-time funding totaling $5,030,845. Also, Montebello USD's Consortium allocation (ongoing funding) was reduced from $15,588,254 Million to $12,948,225 Million. Last, currently, with the implementation of the new LARAEC funding formula, MUSD's funding allocation out of CAEP is $10,661,395. A) On November 15, 2019, the Consortium leadership resolved to hold a special meeting to finalize the funding formula including: 1. The LARAEC Office reported on the Eide Bailly audit of student counts, a final report of which was introduced. 2. Vasquez and Company, LLP provided a progress report on the development of the LARAEC oversight policies and procedure. 3. The LARAEC proposed effectiveness report was presented. 4. A special Board Workshop was scheduled to finalize the development of the LARAEC funding formula 5. Adopted Bylaws to operationalize and provide uniformity to the governance of the consortium. Exhibits 1-3A. B) On December 20, 2019, the Consortium leadership held a special meeting to finalize the funding formula and address any pending items to fully implement the recommendations of the State Auditor's Office. The meeting was facilitated by members of the CAEP Technical Assistance Office. The following items were addressed: A set of objectives were developed in preparation to the workshop. All objectives were met and a new funding formula was developed. The funding formula was to be introduced as an action item for the Consortium to officially adopt on the board meeting scheduled for January 17, 2020. Exhibits 4&5. C) On January 17, 2020, the Consortium leadership approved and adopted the LARAEC funding formula effective on July 1st of 2021. Exhibits 6&7.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We are rating this recommendation as fully implemented because LARAEC adjusted the Montebello Adult Education program's funding in 2018. LARAEC also implemented a new funding formula in January 2020 and developed policies and procedures for reviewing adult education program expenditures, performance, and accounting practices on an ongoing basis.

Annual Follow-Up Agency Response From October 2019

The Consortium conducted a Special Meeting on October 23, 2019 to address the pending items from recommendations 31 and 32. The board consensus was to conduct meetings or workshops, or other activities between December 2019 and March 2020 leading to the development of a funding formula. It is the Board consensus to schedule a workshop as soon as practicable within the aforementioned interval. It is LARAEC's Board intent to conclude all necessary steps as outlined on the submitted timeline to comply with recommendations 31 and 32 by June 30, 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Montebello USD Adult Education has reported to the consortium swift actions to address the elements noted on the recommendation. In summary, Montebello USD returned to the consortium one time funding $totaling $5,030,845. Additionally, Montebello USD's Consortium allocation (ongoing funding) was reduced from $15,588,254 Million to $12,948,225 Million.

Additional steps implemented since the 6-Month report as are follows:

The Consortium has scheduled a Special Meeting (workshop), on December 7, 2018 to reevaluate its funding formula. Staff will provide a number of possible scenarios and the Executive Team will, if appropriate or needed, define/adopt a new funding formula that is fully transparent, fair, takes into account the total number of students in each district, and includes the needs of the students in each district.

Exhibit 1: LARAEC Workshop Agenda, September 21, 2018 and Minutes.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

This recommendation is partially implemented due to the actions LARAEC has taken to adjust the Montebello Adult Education program's funding. Full implementation is pending LARAEC finalizing its new funding formula as that formula will determine the Montebello Adult Education programs ongoing funding.

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

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

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.

Annual Follow-Up Agency Response From November 2023

The Los Angeles Regional Adult Education Consortium has moved forward with the implementation of monitoring procedures to ensure appropriate oversight. LARAEC has engaged with a third-party auditing firm and is in the process of completing a review. Given these major accomplishments, LARAEC has fully implemented the recommendations outlined in the MUSD November 2017 Audit, Items 31 and 32.

As noted in the prior response, on March 17, 2021, the LARAEC Executive Board approved the newly developed Member Districts Monitoring Procedures (a copy of the LARAEC Member District Monitoring Procedures was previously submitted to the state auditor's office). On May 19,2021, the LARAEC Executive Board scheduled the first review date in January, 2022 and discuss hiring a 3rd party auditor to conduct the reviews. On November 17, 2021, the LARAEC Executive Board approved an engagement letter (with Eide Bailly, LLP) to provide 3rd party auditing services on behalf of the consortium. During contract approval Eide Bailley ended the engagement as reported during the December 14, 2022 LARAEC Executive Board meeting.

Since the last communication, LARAEC engaged Clifton Larsen and Allen (CLA, a 3rd party auditor) to carry out the Member-district Monitoring Procedures as discussed at the February 2023 Executive Board meeting and as evidenced by the scope of work provided as Exhibit 14. CLA initiated the LARAEC monitoring procedures of the five districts in April 2023. As part of the auditing process and at the request of the auditing firm and member-districts, new clarifications and procedures were added to the original monitoring document and approved on October 18, 2023. These additions created uniform forms and definitions and provided clarity for verifying assurances. This process of conducting the first review strengthened the process for future years. LARAEC is scheduled to begin its next monitoring phase in Summer 2024.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

The consortium developed procedures to oversee the reporting and collection of key data and contracted with a third party to conduct monitoring of consortium members.

Annual Follow-Up Agency Response From October 2022

In addition to implementing a funding formula, the consortium has also implemented comprehensive Member District Monitoring Policies and Procedures to ensure appropriate oversight. Given these major accomplishments, LARAEC has Fully Implemented the recommendations outlined in the MUSD November 2017 Audit, items 31 and 32.

A) On March 17, 2021, the Consortium leadership held a board meeting to approve the implementation of the newly developed LARAEC Member District Monitoring Policies and Procedures (a copy of the LARAEC Member District Monitoring Policies and Procedures document is included in the board packet as Attachment A). The following items were addressed: 1. The board approved the implementation of the LARAEC Member District Monitoring Policies and Procedures effective as of July 1, 2021. 2. The board approved the implementation of training to assist districts with rollout of the LARAEC Member District Monitoring Policies and Procedures. Exhibits 8&9

B) On May 19, 2021, the Consortium leadership held a board meeting in part to discuss the first set of "reviews" or audits as part of its oversight responsibilities. The following items were addressed: 1. The board tentatively scheduled the first review date in January, 2022. 2. The board discussed hiring a 3rd party auditor to conduct the reviews. Exhibits 10&11

C) On November 17, 2021, the Consortium leadership held a board meeting in part to discuss and adopt the Eide Bailly, LLP engagement letter to provide 3rd party auditing services on behalf of the consortium according to the engagement letter and timeline provided (a copy of the Eide Bailly Engagement Letter and amended timeline is included in the board packet under item 5.1). The following items were addressed: The board approved hiring Eide Bailly, a 3ds party auditor, to conduct the reviews according to the engagement letter provided. Exhibit 12&13

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

We assessed this recommendation as partially implemented pending LARAEC completing periodic reviews of consortium member's enrollment, attendance, and expenditure data. LARAEC has taken meaningful steps to develop procedures to oversee the collection and reporting of key data. However it is still in the process of contracting with a third party to conduct periodic reviews that will ensure the information provided by consortium members is accurate.

Annual Follow-Up Agency Response From October 2019

Vasquez and Co., LLP was hired by the Consortium to develop policies and procedures for the oversight and monitoring of CAEP funds. Their fieldwork commenced in July of 2019.The first draft of the policies is expected by the end of November 2019.The final draft is expected by the end of December 2019.Training on the new policies and procedures for all LARAEC member districts will start subsequent to the annual adoption of the document.The new policies and procedures will be in effect as of July 1, 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Additional steps implemented since the 6-Month report as are follows:

Changes in personnel at MUSD Adult Education resulted in temporary delays of the quarterly reports from MUSD to the Consortium, a report for SY 2016 - 17 will be presented by MUSD on the next LARAEC Regular Board Meeting on November 16, 2018.

The LARAEC Executive Board has approved hiring two independent auditor firms: 1)Vasquez & Company LLP to create, review, and enhance fiscal policies and procedures and 2)Vaverinek, Trine, Day Y Co., LLP to conduct regular consortium audits to ensure the accuracy of enrollment, attendance, and expenditure data.

Exhibit 2A: LARAEC Regular Board Meeting Agenda, August 17, 2018, and Minutes. Exhibit 2B: LARAEC Regular Board Meeting Agenda, September 21, 2018, and Minutes.

The Executive Board of LARAEC would like to thank the State Auditor's Office for allowing the opportunity to enhance its policies and practices through the implementation of the recommendations listed on the MUSD Audit Report dated November 2, 2017 (State Audit #1017-104). The implementation of the noted recommendations has resulted and increased accountability and transparency. More importantly, LARAEC's students will benefit from the implementation of a more efficient and effective educational program. All of the implemented activities, over the course of the last year, thus, conclude with the full implementation of the recommendations offered by the State's Auditor's Office.

Exhibits

1. Exhibit 1: LARAEC Workshop Agenda, September 21, 2018 and Minutes

2. Exhibit 2A: LARAEC Regular Board Meeting Agenda, August 17, 2018, and Minutes.

3. Exhibit 2B: LARAEC Regular Board Meeting Agenda, September 21, 2018, and Minutes.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

This recommendation is partially implemented based on LARAEC engaging with vendors who will help it develop policies and conduct regular audits. Full implementation is pending LARAEC adopting the policies and procedures developed by its contractors around the proper collection and reporting of enrollment, attendance, and expenditure data.

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.

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

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

All Recommendations in 2017-104

Agency responses received are posted verbatim.