Española Schools must fix errors

Lack of urgency is ‘shocking,’ he says

Released one month ago, Española School District’s annual financial audit indicated that poor management by the state Public Education Department led to a series of fiduciary mistakes that cost the struggling district more than $3 million.

But now, State Auditor Brian Colón said he is disappointed in how district officials have handled the financial crisis, even after Española regained control of its finances last July. Before then, PED had controlled the district’s finances for two years.

One of the key findings in the audit was an anticipated $1.2 million in IRS fines, caused by a failure to notify employees about health insurance options. The audit states that business managers assigned to the district by PED were at fault for the error.

Colón said, however, that the district’s response after the errors were discovered in September has left a lot to be desired.

“Their lack of urgency … was shocking,” Colón said of the district.

In an attempt to have the

fines forgiven or significantly reduced, district officials sent the IRS multiple letters, explaining that they did not have control of their finances when the mistakes were made.

To date, the IRS has not sent an official response to the district. Those letters, Colón said, are part of the problem.

“They were sorely lacking in terms of specificity and in terms of any kind of real appeal to the IRS,” he said, adding they lacked basic information about the IRS forms. “I instructed them to rectify it immediately.”

He went on to say he felt the district was “ignoring” letters from the IRS, due to their lack of action.

In multiple Española School Board meetings since the district discovered the errors, board members have said PED should be held responsible, including by paying at least part of the millions of dollars lost.

In multiple statements sent to the media, PED has not admitted responsibility for the errors, but has said it is working with the district on the resolution. Whether or not a resolution has been reached remains unknown.

Colón said in meetings with former Española superintendent Bobbie Gutierrez and Education Secretary Ryan Stewart, it became clear both sides were abdicating responsibility for the errors.

“There’s no more finger pointing that can go on,” he said.

Colón said his office’s next step will be to write a referral to the Legislative Finance Committee to launch a full investigation into the reasons behind the financial situation at the district. He expects to make the referral in the next couple of weeks.

He also said he was disappointed in the large number of repeat findings in the district’s fiscal year 2019 audit. Colón had previously highlighted repeat findings as a concern in the district’s 2018 audit in a letter he wrote May 2019.

The auditor’s office will soon begin an analysis of agencies with long histories of repeat findings, Colón said. The goal is to find out why some agencies struggle to correct issues from previous years.

Española School District, he said, will be one of those agencies included in the analysis.

Neither Superintendent Fred Trujillo nor multiple Española School Board members returned requests for comment.