TUSD Board To Consider Audit Committee Charter, Restore Transparency

Ricky Hernandez and Adelita Grijalva chat outside the public’s earshot
[polldaddy poll=9652316]

The Tucson Unified School District Governing Board will discuss restoring integrity to the Audit Committee at tonight’s meeting. The public will have an opportunity to address the Board during the Call to the Audience portion of the meeting.

Under the leadership of Adelita Grijalva, the Committee had lost its independence and value. When Board member Michael Hicks was named president in a unanimous vote, he committed to strengthening oversight and accountability. The Audit Committee agenda item signals that things are definitely changing in the District.

Sanchez and Grijalva forced watchdog volunteers off of the Audit Committee. Sanchez and Grijalva made the move to end the terms of the more vocal members of the Committee with the excuse that they wanted only residents of the District to serve. Grijalva made the argument that only people who lived in the District could have a sincere interest in the District. Yet, Grijalva, Kristel Foster, and former Board member Cam Juarez had no objection to receiving campaign donations from parties outside the District.

Sanchez moved to evict Chairman Jim Lovelace and Member Chuck Kill from TUSD’s Audit Committee in 2015. According to sources, Sanchez was furious after Lovelace’s Arizona Daily Star op-ed, Time for TUSD to stop making unforced errors, made waves. Unlike some of Grijalva, Juarez, and Foster’s campaign donors, both Kill and Lovelace owned property in the District.

Grijalva quickly installed Ricky Hernandez to chair the Committee. Hernandez, the CFO in the Pima County Superintendent’s Office has a clear conflict of interest through his employment and his family members, who work in the District. Bill Tong and Todd Anderson were also placed on the Committee. Both later resigned. Anderson did not give a reason and Tong cited the fact that his wife’s position as TUSD director of Employee Relations created a distraction.

Originally Grijalva and TUSD CFO Karla Soto were given voting powers, but eventually relented to public pressure to remove their voting powers.

Under Hernandez’s chairmanship the committee has still not filled the internal auditor postion. The internal auditor postion was created roughly two years ago. This dereliction of duty by Hernandez has built distrust in the community. In an effort to spin the situation, Sanchez is now on record with a remarkable claim that no one wanted an internal auditor.

“It is still amazing that someone who violated any reasonable reading of the Audit Committee’s rules concerning conflicts of interest continued to serve after these conflicts were revealed. He then, without protest from other members of the Committee, made the motion and then voted to recommend the charter changes that legalized his membership. This and other incidents over the past several years indicate how badly TUSD’s ethical culture is broken. The new Board must lead major changes in TUSD and this is an fitting place to start,” stated Stegeman.

The agenda item calls for restoring the Committee’s charter. It reads in part:

Tucson Unified School District Governing Board -Audit Committee Charter

Audit Committee Authority

The Tucson Unified School District (TUSD) Governing Board met on June 26, 2007 and voted to establish an Audit Committee for TUSD.

Mission

The TUSD Audit Committee was created to assist the Board with three overarching goals. These goals are:

1. To assist the Governing Board in complying with its fiduciary oversight obligations.

2. To provide advice and assistance to TUSD Staff and make recommendations to the Board regarding strengthening internal financial controls.

3. To provide greater transparency over public funds while improving public trust.

Membership

The Audit committee consists of five members appointed by the Governing Board.

Each member’s term is for four years, with no more than three members being appointed every two years. The maximum number of consecutive years a member may serve is eight. All terms of office shall end in August of the final year of the member’s term regardless of when the appointment was made by the Governing Board. In the event of a vacancy on the committee before the expiration of the vacating member’s term, the Governing Board shall appoint a person to serve for the remainder of the term of the vacant seat. That person may be reappointed at the end of the term at the discretion of the Governing Board.

Transition to Staggered Terms:

In August of 2009, the Governing Board will appoint three members for 2-year terms. In August of 2011, the Governing Board will appoint members for 4-year terms.

The members of the Audit Committee must collectively possess knowledge in accounting, auditing, financial reporting, and school district finances. The following individuals cannot serve on the Audit Committee:

a) Anyone who within the last two years has (i) been an employee of TUSD or (ii) sold goods or services to TUSD.

b) Anyone who owns or has a direct and material interest in a company, or who holds a leadership position in an entity, which provides substantial goods or services to TUSD.

c) Anyone who has participated in litigation or other legal matters against TUSD.

d) A close or immediate family member of anyone who would be prohibited from serving under (a) – (c). The term “close or immediate family member” includes parent, sibling, nondependent child, spouse, spouse equivalent, or dependent, whether or not related.

e) An individual who would otherwise be excluded may serve if, after full disclosure to the Governing Board, the potential conflict of interest is not material and does not appear so from the public perspective.

f) Any member who develops a conflict of interest while on the Audit Committee must disclose such conflict. The other Committee members shall, by majority vote, make a recommendation to the Governing Board, which will decide whether to remove and replace the affected member.

Duties and Responsibilities

General

The Audit Committee elects a Chair and a Vice Chair who presides in the Chair’s absence.

The Audit Committee meets at least four times per year, and at additional times when necessary, to fulfill its responsibilities.

The Audit Committee complies with the Open Meetings Law and may conduct executive sessions as allowed by that law.

The Audit Committee may ask members of management or others to attend its meetings and provide pertinent information as necessary.

The Audit Committee, in consultation with the Governing Board, may have access to all information it deems necessary to carry out its duties, consistent with Arizona law.

The Audit Committee may request information from TUSD that the Audit Committee deems necessary to carry out its duties and responsibilities. These Requests For Information will be made only by the Audit Committee Chair. Any member wishing to request information will do so by submitting the approved committee request form to the Audit Committee Chair for approval. If the Audit Committee Chair approves the request, then the Audit Committee Chair will send the request to the Superintendent for processing. If the Audit Committee Chair does not approve the request, two members of the Audit Committee may override the request denial. In the event of an override, the Audit Committee Chair is required to submit the request to the Superintendent.

Any decision of the Audit Committee requires three affirmative votes. Members who are physically absent from a meeting can participate through audio or video connections.

Proxies cannot be granted.

The Audit Committee may hire professional consultants with Governing Board approval.

The Audit Committee reports to the Governing Board, at least annually, its activities, findings, and decisions. Reported findings should include any suspected fraud or abuse or material defects in internal management controls, and any significant failure to comply with laws, district policies or regulations.

The Audit Committee agenda is set by the Chair. Any member wishing to place an item on the agenda will do so in the same manner as a Request For Information.

The Audit Committee may dismiss from the Committee any member who has had three consecutive unexcused absences or five absences in any twelve month time period.

Dismissal requires a majority vote of a quorum of the committee.