Update on the PUSD Deficit Debacle
3/11/25 by Dan Kearns
3/11/25 by Dan Kearns
As many of you are aware, our school district finds itself in is serious and unique financial situation which has been in the making (and kept quiet) for years. The intent of this article is to shed light on the reality of the situation in response to the misleading information given out by PUSD officials so that citizens may engage with clarity and purpose.
The 2022 Audit Report provides excellent examples of the severity and extent to which district has failed to uphold its Core Value and Strategic Goal of fiscal responsibility. The findings of the audit can be found on pages 81-91 of the document linked above and show that the district: did not record revenues and expenditures in the amount of $1,049,342; failed to recognize and record appropriate entries in the amount of $1,671,492; could not locate personnel files possibly resulting in incorrect payment of employees or payments to employees no longer working for the district; unable to reconcile cash amounts in bank accounts; not preparing bank reconciliations at Portola High for an entire school year; a teacher teaching a class of 20+ students without proper authorization and credentials; withholding teacher salaries in the amount of $1,909,931 and many more. One would think that that such findings would be a staunch dose of reality and a wake-up call to the district's Business and Payroll team, administration and board members. Apparently not, despite the years they have had to address these issues.
The district received the 2023 Audit Report in August of 2024 but just made it public at the March 5, 2025 board meeting (YouTube Video HERE public comment begins at 2:01:20, proof that the board members voted to accept the audit without reading it begins at 2:34:50). This audit contains findings (starting on page 86 of the document) that are similar to the previous one, such as: payables and receivables for a total of over $700,000 not accrued; not reconciling cash amounts in bank accounts; deficiencies in internal control over financial reporting; inability to prove that 13 awarded construction projects for over $15,000 each followed proper bidding processes; 2 accounts of not following policy related to time accounting; potentially misplaced records; withholding teacher salaries in the amount of$1,511,071 and, again, many more. You will recognize many of these findings as repeat findings of continued failure to follow state and district policies. Again we ask, what are the members of the Business and Payroll team doing if they are not correcting these issues?
The audit includes simple and specific instructions on how to correct these findings. Why have the suggested internal controls and procedures not been implemented and followed? How much are we spending on the salaries of these 8 individuals who apparently cannot perform the tasks we have hired them to do? Why is the interim superintendent Mr. Frost not asking these questions? Why are the Board Members not asking these questions? Why are we considering laying off teachers to save money when there is so much dead weight in the administrative office? Why has the board not read the most recent audit in the middle of a financial crisis? Why are the persons responsible for this financial crisis being moved to new positions within the district office instead of being let go? Why are the Board Members and Superintendents turning a blind eye to blatant nepotism within the administration? If you would like answers to these questions, please utilize the contact information at the end of this article.
To further illustrate the severity and uniqueness of this situation, I direct your attention to an article in which Mike Fine, CEO of California's Fiscal Crisis and Management Assistance Team states that "We’re very, very concerned about Plumas. They have already borrowed to a point they can’t pay back, and there has been some finessing of the data to make it look better than it is." Mr. Fine can be heard testifying in front of the California State Senate explaining that PUSD is likely to need an emergency loan in order to avoid going under. In the last 34 years, a state emergency loan has only been given out 9 times. To watch the video of Mr. Fine's testimony, go to the California Senate Media Archive, scroll down to 02/27/2025 Senate Budget and Fiscal Review Subcommittee No. 1 on Education, click on WATCH and proceed to time stamp 1:25:50. Additionally, in a final attempt to help our district avoid the need for emergency state funding, the California Department of Education has sent Robert Shemwell to assist our districts business officials in doing their jobs. Mr. Shemwell can be heard addressing the PUSD board at time stamp 1:43:50 of the March 5 board meeting.
In light of the obvious reasons for our district's serious and rare financial situation, one has to wonder what the intent of Interim Superintendent Jim Frost's letter to Staff, Parents and Community Members was. In this letter, Mr. Frost accuses the community of having "creative ideas" regarding the reasons for the district's financial situation. Interestingly enough, our "creative ideas" appear to be more in alignment with the findings of two consecutive, independent auditors than his whimsical explanations do. Mr. Frost continues to mislead the public by stating that "We are not the only district in this state facing the same situation." The statements and data provided in the previous paragraph directly refute this bogus claim made by our interim superintendent. How much are we paying him? Where did he come from? Who recruited, vetted and hired him? Why is Mr. Frost avoiding the elephant in the room instead of simply coming up with a plan to follow the clearly laid out corrective actions provided by the auditors? If you would like answers to these questions, I suggest you email him at [email protected]. We need a superintendent with the courage and intestinal fortitude to get to the root of the issues we are suffering from. We need a superintendent who will call out nepotism, incompetence and waste instead of sweeping it under the rug if we are going to fix the mess we are in. We need a superintendent that will tell the truth, be transparent and accountable and hold their subordinates to the same standards. Finally, and most importantly, we need a superintendent who will prioritize what is best for the children of this district, above all else. The district is currently seeking someone to fill the superintendent position. It appears they need our support in making wise decisions.
While the hole we find ourselves in is deep, the way out is simple. We the people have lost control of our board, partially because they have forgotten that we are their bosses, and partially because we the people have become complacent and distracted from our duties. It is our duty and right to regain control of the board. We do that by simply paying attention, participating and holding those we have elected to do our will accountable for their actions. We are out of practice in this regard, but it is well within our capabilities and the system is designed to support us in this endeavor. The financial solutions to the current deficit are also simple and are provided in a few lines on less than 22 pages of both audits combined. We need to ensure that the persons we elect and hire to conduct our business for us are doing so in accordance with the law, internal policies and our will (and possibly find out what they have been doing in the meantime). If you would like to learn more about the importance and role of citizen participation, please watch my YouTube Video on this topic.
Your voice and opinions matter. The state of our schools is the direct result of the community's lack of engagement with the school board. If you would like to become involved in the recovery of our school system or learn more about what is going on, please attend the next PUSD board meeting which will be held today, Wednesday, March 12, at the GES Multi-Purpose Room or watch it live on YouTube.
OR, email each or any of the following persons:
Interim PUSD Superintendent Jim Frost
[email protected]
PCOE Superintendent Andrea White
https://www.pcoe.k12.ca.us/apps/email/index.jsp?uREC_ID=2718079
Board Member JoDee Read
[email protected]
Board Member Chelsea Harrison
[email protected]
Board Member Leslie Edlund
[email protected]
Board Member Joleen Cline
[email protected]
The 2022 Audit Report provides excellent examples of the severity and extent to which district has failed to uphold its Core Value and Strategic Goal of fiscal responsibility. The findings of the audit can be found on pages 81-91 of the document linked above and show that the district: did not record revenues and expenditures in the amount of $1,049,342; failed to recognize and record appropriate entries in the amount of $1,671,492; could not locate personnel files possibly resulting in incorrect payment of employees or payments to employees no longer working for the district; unable to reconcile cash amounts in bank accounts; not preparing bank reconciliations at Portola High for an entire school year; a teacher teaching a class of 20+ students without proper authorization and credentials; withholding teacher salaries in the amount of $1,909,931 and many more. One would think that that such findings would be a staunch dose of reality and a wake-up call to the district's Business and Payroll team, administration and board members. Apparently not, despite the years they have had to address these issues.
The district received the 2023 Audit Report in August of 2024 but just made it public at the March 5, 2025 board meeting (YouTube Video HERE public comment begins at 2:01:20, proof that the board members voted to accept the audit without reading it begins at 2:34:50). This audit contains findings (starting on page 86 of the document) that are similar to the previous one, such as: payables and receivables for a total of over $700,000 not accrued; not reconciling cash amounts in bank accounts; deficiencies in internal control over financial reporting; inability to prove that 13 awarded construction projects for over $15,000 each followed proper bidding processes; 2 accounts of not following policy related to time accounting; potentially misplaced records; withholding teacher salaries in the amount of$1,511,071 and, again, many more. You will recognize many of these findings as repeat findings of continued failure to follow state and district policies. Again we ask, what are the members of the Business and Payroll team doing if they are not correcting these issues?
The audit includes simple and specific instructions on how to correct these findings. Why have the suggested internal controls and procedures not been implemented and followed? How much are we spending on the salaries of these 8 individuals who apparently cannot perform the tasks we have hired them to do? Why is the interim superintendent Mr. Frost not asking these questions? Why are the Board Members not asking these questions? Why are we considering laying off teachers to save money when there is so much dead weight in the administrative office? Why has the board not read the most recent audit in the middle of a financial crisis? Why are the persons responsible for this financial crisis being moved to new positions within the district office instead of being let go? Why are the Board Members and Superintendents turning a blind eye to blatant nepotism within the administration? If you would like answers to these questions, please utilize the contact information at the end of this article.
To further illustrate the severity and uniqueness of this situation, I direct your attention to an article in which Mike Fine, CEO of California's Fiscal Crisis and Management Assistance Team states that "We’re very, very concerned about Plumas. They have already borrowed to a point they can’t pay back, and there has been some finessing of the data to make it look better than it is." Mr. Fine can be heard testifying in front of the California State Senate explaining that PUSD is likely to need an emergency loan in order to avoid going under. In the last 34 years, a state emergency loan has only been given out 9 times. To watch the video of Mr. Fine's testimony, go to the California Senate Media Archive, scroll down to 02/27/2025 Senate Budget and Fiscal Review Subcommittee No. 1 on Education, click on WATCH and proceed to time stamp 1:25:50. Additionally, in a final attempt to help our district avoid the need for emergency state funding, the California Department of Education has sent Robert Shemwell to assist our districts business officials in doing their jobs. Mr. Shemwell can be heard addressing the PUSD board at time stamp 1:43:50 of the March 5 board meeting.
In light of the obvious reasons for our district's serious and rare financial situation, one has to wonder what the intent of Interim Superintendent Jim Frost's letter to Staff, Parents and Community Members was. In this letter, Mr. Frost accuses the community of having "creative ideas" regarding the reasons for the district's financial situation. Interestingly enough, our "creative ideas" appear to be more in alignment with the findings of two consecutive, independent auditors than his whimsical explanations do. Mr. Frost continues to mislead the public by stating that "We are not the only district in this state facing the same situation." The statements and data provided in the previous paragraph directly refute this bogus claim made by our interim superintendent. How much are we paying him? Where did he come from? Who recruited, vetted and hired him? Why is Mr. Frost avoiding the elephant in the room instead of simply coming up with a plan to follow the clearly laid out corrective actions provided by the auditors? If you would like answers to these questions, I suggest you email him at [email protected]. We need a superintendent with the courage and intestinal fortitude to get to the root of the issues we are suffering from. We need a superintendent who will call out nepotism, incompetence and waste instead of sweeping it under the rug if we are going to fix the mess we are in. We need a superintendent that will tell the truth, be transparent and accountable and hold their subordinates to the same standards. Finally, and most importantly, we need a superintendent who will prioritize what is best for the children of this district, above all else. The district is currently seeking someone to fill the superintendent position. It appears they need our support in making wise decisions.
While the hole we find ourselves in is deep, the way out is simple. We the people have lost control of our board, partially because they have forgotten that we are their bosses, and partially because we the people have become complacent and distracted from our duties. It is our duty and right to regain control of the board. We do that by simply paying attention, participating and holding those we have elected to do our will accountable for their actions. We are out of practice in this regard, but it is well within our capabilities and the system is designed to support us in this endeavor. The financial solutions to the current deficit are also simple and are provided in a few lines on less than 22 pages of both audits combined. We need to ensure that the persons we elect and hire to conduct our business for us are doing so in accordance with the law, internal policies and our will (and possibly find out what they have been doing in the meantime). If you would like to learn more about the importance and role of citizen participation, please watch my YouTube Video on this topic.
Your voice and opinions matter. The state of our schools is the direct result of the community's lack of engagement with the school board. If you would like to become involved in the recovery of our school system or learn more about what is going on, please attend the next PUSD board meeting which will be held today, Wednesday, March 12, at the GES Multi-Purpose Room or watch it live on YouTube.
OR, email each or any of the following persons:
Interim PUSD Superintendent Jim Frost
[email protected]
PCOE Superintendent Andrea White
https://www.pcoe.k12.ca.us/apps/email/index.jsp?uREC_ID=2718079
Board Member JoDee Read
[email protected]
Board Member Chelsea Harrison
[email protected]
Board Member Leslie Edlund
[email protected]
Board Member Joleen Cline
[email protected]
