Laguna Beach Unified is about to face an unusually close look at how it handled district money, with Orange County education officials sending in an independent state-level team to examine five years of financial records. The review arrives as the district starts a new school year under a new superintendent and tries to put months of financial controversy behind it.
The Orange County Department of Education engaged the Fiscal Crisis and Management Assistance Team, or FCMAT, after requests from members of the Laguna Beach community, according to the Los Angeles Times. Investigators will examine employee health benefit contributions, related contracting decisions and whether district resources were used appropriately, but officials stressed that the review is not itself a finding of fraud, misappropriation or other illegal conduct.
Laguna Beach Unified confirmed the arrangement in a district news release issued July 14. The district said it will provide records and other information requested by FCMAT, whose analysis is intended to determine whether any findings should be reported under California’s Assembly Bill 139 process.
The Review Reaches Back Five Fiscal Years
The review covers fiscal years 2021-22 through 2025-26, and district officials say records from that period should be available. Superintendent Don Austin, who began the job July 1, told the Los Angeles Times that Laguna Beach Unified does not have a formal policy setting out when older records are purged, meaning its files extend further back than the two-to-four-year retention period common in many districts.
The county education department has agreed to pay FCMAT up to $125,000, so the school district will not be charged for the review, according to the Times report. Austin said district officials and trustees are expected to cooperate with document requests and interviews rather than take a position for or against the investigation.
Health Benefit Questions Are Part Of The Larger Picture
The financial review follows earlier public scrutiny of the district’s employee health benefit spending. In a June announcement about labor agreements, Laguna Beach Unified said new procedures would improve the accuracy of employee and district contributions and described the agreements as a way to correct past fiscal overspending while creating an ongoing labor-management review of health care costs.
Assembly Bill 139 allows a county superintendent to review or audit a school district’s expenditures and internal controls when there is reason to believe suspected fraud, misappropriation or illegal fiscal practices merit examination, according to California law. In Laguna Beach, however, the process has not established that wrongdoing occurred; the eventual findings are expected to go first to the Orange County Department of Education and later be presented publicly at a future school board meeting, with no completion date announced.
