SAN JOSE, Calif. — Fischer Middle School serves students in the largest city in the Silicon Valley, an area known for its technology giants and corresponding initial public offerings, which have spawned more than a few billionaires and countless millionaires. Yet, the school has struggled to obtain a multipurpose room.
In mid-November 2017, Alum Rock Union School District (ARUSD) board members voted to suspend a construction contract to begin the building due to lack of funds, reported the San Jose Mercury News.
The Fischer Middle School multipurpose room isn’t the only project to find itself without an official start date. Heat and cooling projects at several of the district’s elementary schools have likewise found themselves frozen owing to myriad issues with the board “finance, management and governance.” Fortunately, the board received approval from the Santa Clara County Office of Education (SCCOE) for its 2017-2018 budget, albeit four months into the current fiscal year. But the approval comes with a catch — the district must meet conditions that SCCOE attached to its budget approval including the oversight of an auditor to elucidate of the district’s financial accounting.
Among reconciling Alum Rock’s numbers, the auditor will also help locate funds to pay off $25 million in special bonds that were borrowed against though they were not approved by voters back in 2010.
“Historically, the district has submitted a balanced budget that has significantly varied from the actual budget at the end of the year,” wrote Megan K. Reilly, chief business officer of the county office of education, in her letter to Alum Rock, which was quoted in the San Jose Mercury News.
To wit, the board has been subpoenaed by the Securities and Exchange Commission, which is investigating its bond management. Likewise, the district has been under the microscope of the state’s school auditing agency, Fiscal Crisis and Management Assistance Team (FCMAT), which is mandated with helping California’s local educational agencies fulfill their financial and management responsibilities by providing fiscal advice, management assistance, training and other related school business services. Moreover, the board’s behavior has been cited as a liability by investigating agencies.
In the meantime, FCMAT advised renegotiating contracts with Del Terra Real Estate, headquartered in City of Industry, Calif., which manages Alum Rock’s bond construction. One trustee, Khanh Tran, cited the “Negligent FCMAT report” a having “messed up our bonds,” reported San Jose Mercury News. “Our building is on hold because of false allegations against us.”
The Fischer Middle School project remains on hold.