Posted by blank checkbook, a resident of Portola Valley, on Jun 18, 2012 at 6:03 pm

Did the school district just give a blank checkbook to a new employee? Yes, confiscate this thief's house and use it to pay back the debt, then throw him in jail for some serious time. But school district officials are also guilty of serious incompetence. I hope they are taking responsibility for part of this crime.

Posted by Wayne Martin, a resident of the Fairmeadow neighborhood, on Jun 19, 2012 at 7:23 am

The Portola Valley school district seems to be comprised of only two schools, serving perhaps 700-750 students. Most small organizations, like this one, end up placing a lot of trust in their key officials, and often fail to insure that the necessary check-and-balances are in place in the organization, believing that the key people will “do the right thing”, being “honest people”.

From reading the Forensic Audit of the financials of the Portola Valley School District, it is clear that some reasonable checks-and-balances were not in place, such as having a loan committee formed to oversee the use of funds to provide employee loans. There were also several clerical/procedural errors found in the audit, which should have been found in a yearly financial audit, if the yearly audits were being performed by a credible audit team. There also was no mention about the use of any specific software to help manage finances in this district.

In this case, the construction fund was very small, so the use of $100,000 became a significant portion of the fund. But given that there seemed to be few/no internal checks about the validity of the invoices being submitted, one can only wonder how often this sort of fraud goes on in large school construction projects?

Googling “school” “business manager” “indicted” generates a number of on-going cases around the country of school business managers who are, or have been, caught mismanaging funds. With 16,000 school districts nationally, and most of them small, one can only wonder how much fraud/mismanagement of funds goes on undetected, because of the failure of the local school governing bodies to set up adequate financial controls in their districts? The US Public Education System consumes almost $1T/year. Situations like this one at Portola Valley gives one pause to wonder just much of this $1T is going up in smoke due to questionable, or non-management, in all of the school districts around the country?

As to Portola Valley situation, this situation calls into question the capability of the five-person governing board. It’s a shame that this sort of situation doesn’t initiate a complete audit by the State Superintendent of Schools.

Posted by local gurl, a resident of the Greenmeadow neighborhood, on Jun 19, 2012 at 11:36 am

What causes someone like this to take these kinds of actions and jeopardize so much for seemingly so little? Very very sad.

Posted by Interested onlooker, a resident of Portola Valley, on Jun 19, 2012 at 11:48 am
Interested onlooker is a member (registered user) of Palo Alto Online

No blank checkbook was given to a new employee. Hanretty was the chief business official for both Woodside and Portola Valley school districts from 1999-2010, and assistant superintendent in Portola Valley before being promoted to replace the outgoing superintendent, who is now the San Mateo County superintendent of schools.

It's easy to accuse others of incompetence in hindsight. So that the rest of us might learn from your wisdom, what were the telltale signs missed by the boards? It's a popular misconception that "an audit" verifies every financial transaction.