Spending of Some Measure E Funds Explained in Audit

A performance audit conducted last year of the Beverly Hills Unified School District Measure E bond program explains some of the $13 million in Measure E funds that have been spent since the first series of bonds were sold in early 2009.

As Patch , these funds have been spent before any major construction projects have started at the city’s five schools. The $334 million Measure E bond was passed by voters in 2008 to modernize the city's schools.

According to the audit report conducted by San Diego firm Christy White Accountancy Corp., almost $4 million was spent in fiscal year 2010 on projects and services directly related to Measure E.

The report was presented to the Board of Education in January 2011. Patch reviewed it after readers requested further reporting on how Measure E money has been spent.

The report describes $3.83 million in spending during fiscal year 2010, which ended June 30:

• $1.077 million for projects at Horace Mann school
• $708,888 at Beverly Hills High school
• $455,492 at El Rodeo school
• $420,712 at Hawthorne school
• $137,503 at Beverly Vista school
• $503,304 in legal fees
• $494,582 in program administration costs
• $30,724 for “facilities and planning,” which include some of the salaries and benefits of the facilities staff

The report does not detail which school projects were conducted with these funds. At Horace Mann, the money paid for tearing down the school’s annex and erecting bungalows, board Vice President Brian Goldberg said in the comments section of Friday’s story.

About $2.1 million was spent on vendor Strategic Concepts in the prior fiscal year ending June 2009, the report notes. Strategic Concepts is the educational company started by former BHUSD facilities manager , who will be tried on four conflict of interest charges.

The auditors suggested that any funds “recovered from Strategic Concepts should be reimbursed to the Measure E Bond Building Fund.”

BHUSD filed a complaint against Strategic Concepts in 2009 seeking to recover $4 million in fees, and Christiansen filed a countersuit to recoup $16 million related to the Strategic Concepts contract. The litigation has prompted significant spending of Measure E funds.

“As of …November 2010, $642,986 in legal expenses has been paid from Measure E funds, with significant portions of this amount spent on the Strategic Concepts litigation,” the report notes, adding that BHUSD “received an opinion from its bond counsel that these legal fees are permissible expenditures.”

Since that time, the district has spent more than to L.A.-based law firm Quinn Emanuel Urquhart & Sullivan. Quinn Emanuel has represented BHUSD in legal proceedings against Christiansen and former Superintendent Jeffery Hubbard.

Editor's Note: This article errored in originally stating that Karen Christiansen is facing two counts of misappropriation of public funds. The D.A. has dropped those charges.

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