The UTLA hired an independent auditor to document that charter schools in LAUSD were siphoning $600 million a year from the public schools. It is probably more now.
A reader who signs in as “Scisne” left this comment:
A big problem that teachers’ unions locals have is that they are managed by teachers who lack a background in accounting, and especially in forensic accounting.
After a career in business that included being a CEO, I joined my wife in the teaching profession. I was soon elected to the union board and eventually became president and led a strike and a school board recall that resulted in four trustees being recalled. I did it with accounting. I knew forensic accounting from my business career, and a quickly learned about the accounting methods and laws that applied to the school districts.
It was easy to find where and how the district I was in had stashed money, often illegally, and I published a 60-page analysis of what was going on and distributed it to the media and to parents and went on a district-wide public-speaking campaign at social clubs and churches where I also distributed the analysis.
The local media were hostile to teachers unions, so they ignored the analysis — but the parents, especially the professional accountants among them, were outraged at how the district trustees were lying to them and were withholding money from educating their children.
The recall was historic and left the city and county political power structure stunned. Teachers unions at the local level critically need to acquire the accounting know-how and an thorough understanding of applicable state law so that they can competently challenge district budget claims and can educate parents and the general public about the games that school boards play with the money that should be spent on educating children.
Diane Ravitch's blog 
In Canada, most teacher unions have a numbers person for sure
We are going through a very similar period of discovery in our district, the Sausalito Marin City School District in Marin County, CA. We have one traditional public school and one independent publicly funded charter school.
The press have been less than thorough in their reporting, the community less than informed on the realities of our structure or our financing, and the opportunities afforded our children at both schools less than ideal… with one far less than the other.
And now, after a multi-year investigation, the Attorney General found that our district intentionally created a segregated school when the charter school took over the previously co-located campus in 2013 and then furthered the divide by reducing available programming at the newly formed K-8 school… that was instantly saddled with debt to house the younger students in modular buildings at the dedicated middle school.
Oh, and during this time we had a forensic accountant sitting on the board, though she began to recuse herself from all financial matters once our district was under investigation.
I would very much appreciate your review, thoughts, and insight into our small district. I believe that we may serve as a microcosm of the much larger conversation around school choice, equity and equality in education, and local governance.
Well, my union brothers and sisters, if we find ourselves in a dispute with a district that is headed for a strike, might we be well-advised to hire a forensic accountant to look into the finances of our districts?
I am surprised that California does not require an annual independent audit that should have detected any fiscal irregularities. All places where we send public money including charters should require an independent audit. Otherwise, we are inviting, waste, fraud and embezzling.
Love your comment, retired teacher. Thank you.
Each county board of education is required to do this, but the reality is that they are not doing complete audits. The Los Angeles County BoE has been simply rubber stamping LAUSD’s budgets.
I should add that there are a number of math teachers in LAUSD that have worked as accountants and tax auditors. They, along with the dozens of statisticians that are their peers, need to be encouraged to become integral parts of UTLA’s leadership.
and most often those who end up seated on school boards do not have backgrounds in understanding fiscal accountability
Scisne was wrong. It was one of our high school math teachers that discovered the lies our district administration was pimping every year when they claimed the district didn’t have money to lower class sizes and increase pay. When that teacher looked at the district’s books, he found out what they were doing to hide the money, and the local almost went out on strike.
To avoid the strike, the district caved and agreed to put a cap on class sizes and not drop many of the electives in addition to the first raise in years.
You would think that knowing district finances would be a requirement for union reps before sitting at the bargaining table.
Contract negotiations in our district began more than a year ago.
The union negotiators made no effort to go through district finances.
So the rank and file did.
When teachers went through our district’s budgets and audits (which are all publicly posted online), they discovered that spending on teacher salaries had dropped, while spending on admin salaries had jumped 25 percent over the same three-year period.
At the same time, high school teachers were told they’d have to teach an extra class (without pay) to avoid layoffs.
They also found a Yuuuuge jump in spending on Edtech and Chromebooks.
Our Title 1 District has also spent over $200,000 on a lobbyist who’s a retired state rep.
And we have a public relations manager, and a drone to film events for the district.
And they’ve hired an uncertified teacher (only holds a substitute license) at the same pay rate as a 10-year teacher. But, she’s our assistant girls’ basketball coach and the team’s doing great.
And being paid for extra-hours professional development has been replaced with micro-credentialing, where we earn “badges. Those “badges” are required payment if you wish to attend any conferences or workshop. Even a six-hour Reading Strategies workshop in Rantoul, Illinois, requires you to go to about 8 unpaid sessions to earn a “badge” to redeem.
There always seems to money available for bigger admin salaries, a larger admin staff, Ed Tech, Chromebooks, athletics, lobbyists, p.r., but not to give teachers raises that go beyond making up for lost years of declining pay.
Yet when we brought these up, our union president told us we could not go public with the how the district spends it money because A.) We can’t infringe upon management rights and 2.) the arbitrator might rule we engaged in unfair labor practices and impose a contract upon us that we did not agree to. They’ve repeated this message to us at different schools in the district.
Many of our teachers are angry and frustrated with the union leadership – you can see why.
When I was first elected to our local California union board I prepared for contract talks by going to the county ed department and obtaining a complete copy of our district’s budget. When I went to my first board meeting of our local I brought the budget and the board members were amazed and asked me how in the world I had obtained that. Never before had our local union board ever seen, let alone read, a full copy of the district budget. What had always happened in the past is that the district brought to the table a short budget summary that allegedly showed how much money they didn’t have for teachers’ raises.
I had also obtained a copy of the state’s public school accounting manual. More gasps from our local’s board members. I had learned some important facts, such as the fact that Unrestricted general fund money that the district receives remains forever Unrestricted. A favorite district trick is to put Unrestricted funds into Restricted accounts and then tell the local’s board that the money can only be spent for that Restricted purpose. Baloney! Unrestricted money remains Unrestricted and can be — and should be — taken out of any Restricted accounts and spent like any other General Fund money, for teachers and students. It may require some forensic tracing of funds to find out if money in Restricted accounts came to the district as Unrestricted money.
Another common place that districts stash money is in so-called “reserve” accounts, some of which have been given legitimate-sounding names. But the fact is that in California there is only one — just one — authorized reserve: The AB1200 reserve. And it doesn’t allow districts to stash huge sums of money. The basic formula in California is this:
All other reserves are basically slush funds and the money can — and should — be used just like any other General Fund money. (There are some special cases for very small districts with 1000 or fewer students that allow them to carry reserves up to 5%.)
Another trick used by districts that provide post employment benefits (OPEB) is to claim that there are huge “unfunded liabilities” for the benefits that must be funded. This “unfunded liability” lie is also used by enemies of state teachers’ pensions to try to convince voters to end the pensions, so it’s important to know what any “unfunded liability” actually is. Basically, it’s not an actual current debt — it’s an actuarial projection of the sum of the next 30 years of small annual payments. My district gave out a press release to the media that it was $196 million “in debt in unfunded liability” to our OPEB and told the media that it therefore had to terminate out OPEB or go bankrupt. However, I created a slide show and pamphlet that explained what an “unfunded liability” was and showed that the actual annual payment to our OPEB was just 1% of the district’s annual revenues. The district dropped its claim and our OPEB is still intact. Teachers across the nation need to learn what an “unfunded liability” is or else voters are going to kill teachers’ pension plans.
It sounds like you have to get your parents involved. If they are aware of what you are reporting, how could they not want to thwart the district plans? It may be possible to get parents to do the work of examining the budget, especially with the information you have mentioned. Teachers are often limited in what they can openly discuss, so go underground. Teachers were instrumental in helping parents in my community retain neighborhood schools years ago. The district was silencing open dissent by staff, but that didn’t stop some teachers from supporting the efforts of parents to fight consolidation. The district even formed these fake study groups of teachers and administrators to study the pros and cons of consolidation. Any pro neighborhood school comments tended to be ignored and commenters were made aware of their missteps. It wasn’t easy, but neighborhood school supporters were able to get the Board to reject the superintendent’s attempt to grant him his grand plan.