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Audit Finds Troubled Montebello School District Likely Engaged In Fraud

MONTEBELLO (CBSLA) – An audit has determined that the Montebello Unified School District may have engaged in fraud and misappropriation of district funds.

The California Fiscal Crisis and Management Assistance Team released a report Monday in which it determined that Montebello needs to undergo a criminal investigation.

In response, Superintendent Anthony J. Martinez announced Tuesday that the district would conduct further investigation and that several people would be placed on administrative leave.

"The audit findings will provide this board with a road map to help strengthen our administrative and operations controls, protocols, policies and procedures," said board President Joanna Flores in a statement.

The findings were based on an extensive review by the FCMA, which was brought in under the supervision of Los Angeles county education officials in September of 2017 to conduct an audit and determine if wrongdoing had occurred.

The district has long been accused of corruption and financial mismanagement. In March of 2017, the district's financial problems prompted officials to issue layoff notices to 333 teachers and 91 other employees. These were rescinded because the district lacked a valid seniority list, which would have determined which workers lost their jobs.

The district ultimately improved its budget situation by not filling vacancies and tightening spending controls. The latest review focused on the part of the district that provides education courses for adults. The audit found problems in payments to both teachers and nonteaching employees, including:

One teacher averaged more than $233,000 annually during a 4-year period under review. Two others averaged more than $200,000.

The Montebello drama also is playing out through lawsuits from four former employees, including two former superintendents. All four say they are whistle-blowers. One trial is in progress this week, with the superintendent and board members attending as both observers and witnesses.

Late last year, the state auditor, a different entity, looked at Montebello and also found problems. That earlier review concluded that "poor fiscal oversight" had put the southeast L.A. County school system of 28,000 students "in danger of financial insolvency.'

The district serves the cities of Montebello, Bell Gardens, Commerce, Downey, Monterey Park, Pico Rivera and Rosemead.

(©2018 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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