Alum Rock district faces state audit

Much of the controversy stems from decision to work with Del Terra Real Estate Services

“I am concerned the best interests of the students has not been the school board’s highest priority.” — State Senator Jim Beall

Lawmakers in Sacramento on Wednesday authorized a review by the California State Auditor of the troubled Alum Rock Union Elementary School District Board of Trustees.

For years, reports of mismanagement and misspending have plagued the East San Jose district and parents and students have protested the board’s leadership as inadequate.

In June, the Santa Clara County Civil Grand Jury published a report blasting the three-trustee block that controls the board — Esau Herrera, Dolores Marquez and Khanh Tran — for failing “to meet its governance standards and fiduciary responsibility” and urged them to step down.

So far, all three have refused to exit, dismissing the accusations as politically motivated.

Much of the controversy stems from the board’s decision to work with Del Terra Real Estate Services, a firm that, according to the grand jury, repeatedly failed to complete projects on time and that the board allowed to operate without much oversight.

In their letter requesting the audit, Assemblyman Ash Kalra and state Senator Jim Beall requested an audit to look into the board’s actions and determine whether they “threaten the financial, ethical and legal ability of the district to fulfill its mission of educating and serv-

ing its students and their families.”

In the last couple of years, the county’s education office, the state’s Fiscal Crisis Management Assistance Team, the Santa Clara County District Attorney’s office, and the Federal Securities and Exchange Commission have all looked into the board.

“We believe it is time for a more expansive and exhaustive audit of the district to ensure that things do not get worse,” the pair wrote in their request.

Among the issues they asked the auditor to look into is whether the board members violated conflict of interest laws. Critics have accused the district’s outside counsel, Leal Trejo, of having ties to Del Terra.

The audit is expected to be completed in the next six to nine months.

“I am concerned the best interests of the students has not been the school board’s highest priority,” Beall said in an emailed statement. “Despite a highly critical audit by the Fiscal Crisis and Management Assistance Team, the school board did not adopt its recommendations and the Santa Clara County Office of Education was forced to assume veto power over the board’s decisions. I believe a state audit is needed to dive deeper into the district’s ledgers and contracts to determine who is responsible for its financial problems.”

Herrera, the board president, did not immediately respond to a request for comment.

Andres Quintero, a board member who has been a vocal critic of Herrera, Marquez and Tran, attended the hearing Wednesday where the audit was approved.

“I was glad that the committee recognized the severity of the issues at Alum Rock and is authorizing the audit,” Quintero said. “We need all the help we can get.”