Report 2017-104 Recommendation 2 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 #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 In August 2022, LACOE rescinded MUSD's "Lack of Going Concern" designation, subsequently removing the LACOE-appointed fiscal advisor.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

All Recommendations in 2017-104

Agency responses received are posted verbatim.