School District Can't Account for $3.25 Million in Bonds

Updated: May 22, 2018

State Superintendent of Public Instruction Tom Torlakson has revoked the fiscal independence of the Alum Rock Union School District, after recent audits found that the San Jose district could not account for nearly $3.25 million in bonds.

The audit focused on the district’s relationship with Del Terra Real Estate Services, which was hired to oversee construction of bonded projects and bond-related contracts. The audit found that the contracts overseen by the company left the district open to financial vulnerabilities.

During the past nine years, the district’s voters have approved $444 million in school construction bonds – all promising to fix school buildings. Several Alum Rock schools are preparing to start the 2017-18 school year without central heat and air, secure roofs or functioning bathrooms.

Under the state’s decision, the Santa Clara County Office of Education will have greater oversight over the district, and will be responsible for issuing paychecks and paying vendors.

The decision to revoke the district’s fiscal independence came a week after community activists raised objections to political ties between Del Terra Real Estate Services Chief Executive Officer Luis Rojas and Superintendent Torlakson, who has received campaign contributions from Mr. Rojas. The San Jose Mercury News pointed out that while normally an elected office holder would recuse himself from such a decision, Superintendent Torlakson did not do so. However, the paper also noted that the letter revoking the districts independence was signed by Superintendent Torlakson’s deputy. (Source: San Jose Mercury News, June 30.)

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