TUSD Board To Consider Audit Committee Charter, Restore Transparency

Ricky Hernandez and Adelita Grijalva chat outside the public’s earshot
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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.

8 Comments

  1. Juan Ver Galarga, it is possible that because of only following the issue for a few months, you are missing a lot of the substance of the argument as you join in the personalized chorus of personal attacks. With the Audit Committee rules going back to the way they were, the District will be able to move forward. The (now reversed) changes were absolutely transparent gerrymandering to make sure that critics could be replaced with “yes” men who had drunk the Superintendents’ kool aid. There is no question that this compromised the audit committee and effectively crippled its watchdog function. The changes were a frivolous way to set policy (to get rid of individuals instead of to improve education) and gave a lie to Sanchez’ attempts to INVITE out of District parents to send their kids to TUSD (the failed Freuchtendler/Sabino “white corridor”.) In other words, your out of district kids are welcomed, but you are not! In addition, the consequences of not allowing ANY out of district parents on ANY district committees could easily have affected many committees, including SCPC and others (if enforced). Finally, as schools on the Districts’ border may receive a significant amount of donations from out of district parents, this is almost “taxation without representation”.

    You are right, Richard Hernandez IS a highly experienced school finance expert and, I might add, has always been a very nice and informative person for those of us running for school board . In the Cty Superintendent’s office, he is the person who handles those elections, and has always been professional and informative. But by becoming head of the audit committee in such a blatantly manipulated way, he has shown himself to either be politically completely native (kind of a requirement for Kool-Aide drinkers) or unethical. I don’t believe any kudos are in order, frankly: he was put in place by a political boss who is losing power at each board meeting to act in the completely unregulated way of the past. If in fact it was his decision to leave, he was simply the latest one to jump off of Sanchez’ sinking ship (think of all the administrators who were very highly qualified who left in order to save their careers from rank unprofessionalism and outright corruption). Hernandez was smart to resign before he was fired, and the Board was smart to replace the provisions relating to conflict of interest.

  2. Kudos to Mr. Hernandez for being willing to step aside from the Audit Committee and take the wind out of the sails of people like Hicks and Stegeman. It’s interesting that Stegeman hides behind the dais to make these decisions about one person. like Sedgwick focusing on HT’s certification, but won’t actually have a civilized conversation with anyone who disagrees with him. As someone who has only been following this issue in the last few months, I’m not understanding why you wouldn’t have someone with Mr. Hernandez’s SCHOOL FINANCE experience on the Committee? Someone who is a true stakeholder in the work the District does. I’m sure Mr. Hernandez is probably breathing a sigh of relief that he can get to spend more time focusing on other areas, than focusing on the childish antics of the petty few.

  3. It is heartening to see the responsible business like approach of Chairman Hicks. An initial assignment of the audit committee should be a full explanation to the public of how and why H. T. Sanchez has been given such a seemingly outrageously high compensation package, beginning with his initial contract and a justification as well for his raises and bonuses and any other monetary payouts for whatever reason. Does ANY School district of a comparable size, etc. offer a compensation package equal in cost to taxpayers of Mr. Sanchez`s?

  4. “Under the leadership of Adelita Grijalva”, a tragic miscarriage and abuse of the English language, but a very flattering way to describe a rudderless ship adrift in a cease pool of nepotism and unabashed corruption.

  5. Yes oh yes this change is demanded. I hope new board continues to make it #1 priority the education of our youth enrolled at tusd.

    Ricky clearly had a conflict and his newly elected boss the Pima county Superintendent of Schools should mandate his voluntary resignation.

    We just witnessed with 301 monies how this group of Yahoo’s deliberately mislead the community.

    I hope some of you will speak at meeting tonight demand the change so that tusd may continue due north travel of making classroom activity the ONLY priority at tusd.

    Fire HT Sanchez before the cancer causing agent poison rest of organization.

  6. Kudos to Mr. Hicks, I hope the other board members vote to restore a little bit of respectability to the TUSD Board. Clearly the way and the reasons used to remove Mr. Lovelace and Mr. Kill, two respectable members of our community, from the committee, was a bogus and blatant abuse of power by the then board majority. Unfortunately having an inept,inexperienced superintendent and legal counselor that should have cautioned the board on possible (and most probable) negative fallout and future negative consequences to the district allowed for this charade to happen. If Mr. Hernandez would have had an iota of integrity himself, he would have never accepted the appointment in the first place. Unfortunately he was and still is in cahoots with the former board majority and Superintendent Sanchez in their bid to shield the public from the real financial and other issues facing the district. Mr. Tong and Mr. Anderson have my respect in doing what was ethically the right thing to do.
    Congratulations Mr. Hicks and the rest of the Board members considering cleaning this mess up, this is surely the right direction in bringing respect and integrity to TUSD. The swamp has to be drained.

  7. Simply put, keep the housecleaning going. Boot Hernandez the hell off the committee and replace him with a professional not a lackey.

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