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Payment Scandal Rocks SF Unified

The San Francisco Unified School District's offices on Franklin Street
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The San Francisco Unified School District's offices on Franklin Street
 
Administrators funneled money into own accounts, documents show

A group of San Francisco Unified School District administrators, including an associate superintendent, engaged in a long-running scheme to funnel district money into their personal bank accounts via nonprofit community organizations, according to internal documents.

The administrators worked out of the Student Support Services Department, which partners with community organizations to provide thousands of San Francisco students with health education, substance abuse counseling, violence prevention, after-school activities and other services.

The scandal has stunned San Francisco educators and thrown Student Support Services into turmoil at a time when the district faces a $113 million deficit. Some vital student services have been threatened as investigators comb through millions of dollars of transactions dating back at least four years.

Documents obtained by The Bay Citizen under a California Public Records Act request show that administrators directed money from community organizations into their own pockets. Some also fabricated overtime reports and falsified signatures on district contracts. The records also include copies of checks and invoices, suspension and termination notices and contracts bearing signatures that the district says were falsified.

“It was a system developed by a small group of individuals operating outside of the budget and finance department,” said Deputy Superintendent Richard Carranza, who participated in the district’s investigation.

The documents, many redacted, show evidence of transactions totaling tens of thousands of dollars and possibly more.

In an interview, Carranza said the district opened the investigation in June after a community organization raised questions to him about irregular accounting practices. The San Francisco district attorney’s office is conducting a separate investigation, according to Carranza and others familiar with the inquiry. A spokesman for that office declined to comment.

The district’s investigation is focused on Associate Superintendent Trish Bascom, who is the former head of Student Support Services, and four of her co-workers. For years, until she retired in June, Bascom had primary control over money distributed to community organizations that were hired to provide services for the district. The department’s annual budget is nearly $20 million.

The documents show that community organizations under contract to the district made payments directly to individual Student Support Services administrators. Carranza said such payments violated district regulations. Bascom’s lawyer, Stuart Hanlon, confirmed that Bascom had approved the payments, but he said the transactions conformed to district regulations. Hanlon said the payments were bonuses approved by Bascom to make up for salary cuts.

“If they want to call it stealing, they can,” he said. “I would call the district incompetent. It wasn’t stealing. It was paying people bonuses for hard work.”

Kevin Truitt, who succeeded Bascom, said investigators seized computers and documents shortly after he arrived at the end of June. The seizures, along with the removal of key department officials, forced Truitt and his staff to scramble to put programs in place.

“I’m not privy to the documents or computer files pertaining to the department I now run,” Truitt said in an interview.

The scandal has made it difficult for Student Support Services administrators to track financing for programs, according to one district official.

In an e-mail, Carranza wrote that Student Support Services programs “are being fully funded. We are committed to ensuring that our students are not penalized for the actions of a few individuals.”

In addition to Bascom, other administrators under investigation by the district include Meyla Ruwin, the department’s senior executive director; Betty Wong, Bascom’s assistant; and two of Bascom’s administrative analysts, Linda Lovelace and Lilian Capuli, according to Carranza and documents.

Lovelace was fired in September, documents show, and she declined to comment for this article. Ruwin and Wong were placed on administrative leave, Carranza said. Neither could be reached for comment. Capuli received a termination notice on Sept. 7 but has requested a hearing to dispute the accusations, Tyler Paetkau, her lawyer, said.

Paetkau, in a letter to the school district, said district officials were using Capuli as a scapegoat. “Capuli simply followed the directives given by her superiors,” the letter said.

In an August letter informing Lovelace of her dismissal, the district accused her of supplementing her $83,000 salary with $26,126.64 in unauthorized district money during the 2009-10 school year. According to the district and invoices, the money was paid to Lovelace by Bay Area Community Resources, a Marin County organization that operates after-school programs for San Francisco students.

Officials with Bay Area Community Resources could not be reached for comment. It is not known whether the group, or any other community organizations, are under investigation.

Lovelace was in charge of administering contracts between the school district and Bay Area Community Resources. According to her termination letter, she signed contracts on behalf of officials who had not given her authorization and submitted false claims that she had worked 12- hour days during the school year.

“Your conduct in intentionally requesting and receiving an additional four hours of compensation every single day is tantamount to stealing,” stated the dismissal notice, which was written by Roger Buschmann, the chief administrative officer. “Particularly at a time when the district faces a multimillion-dollar deficit and forced layoffs of many skilled and diligent professionals, such conduct is appalling.”

Last May, documents show, Lovelace received a check for $40,000 from Edgewood Center for Children and Families, a San Francisco nonprofit that provides mental health, violence prevention and teacher coaching services to the district. The termination letter alleged that Lovelace had gotten money from Edgewood “for which you knew you had not provided services.”

Jeff Davis, the Edgewood chief executive, declined to discuss details of the transaction except to say that all transactions involving the company had been authorized by the school district. Davis said Edgewood was cooperating with authorities.

“Edgewood could make a payment on full authorization without knowing if the money was later misused,” Davis said.

Carranza, the deputy superintendent, said the Edgewood payments had “absolutely not” been authorized by the district.

In May, Edgewood issued a $15,000 check to Capuli, the administrative analyst, according to the documents. Capuli also received payments from Bay Area Community Resources, and possibly other agencies, totaling $8,000 during the 2006-7 school year, the district alleges.

In a letter to Capuli, the district said the $15,000 payment appeared related to her approval of a $1,092.34 expense reimbursement to Bascom. It said there was no evidence Bascom had incurred the expense.

“At the very least, your approval of this invoice without making any effort to evaluate the accuracy of the receipts being submitted is negligent,” the letter to Capuli said. “At worst, it seems to involve a quid pro quo, in which you were approving payment of district funds to Bascom on an improper submission in return for her approval of the $15,000 Edgewood payment to you.”

Paetkau, Capuli’s lawyer, denied the accusation.

Hanlon, Bascom’s lawyer, called it “totally false.”

Jennifer Gollan contributed reporting.

This article also appears in the Bay Area edition of The New York Times.

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