Dennis Clay

Project Analyst
West Contra Costa Unified School District
1400 Marina Way South
Richmond, CA 94804
510-307-4588

2015 Updates
The following documents were prepared after the posting of the draft Agreed Upon Procedures
portion of the performance audit to the CBOC website on April 16, 2015. This is not meant to be a
definitive or thorough take of the audit, but merely a quick read on some of the parts within it.
One of the phrases that appear frequently within the draft audit is Proposition 39. This is the
original source of much of the Ed Code governing the Districts authorization and sale of bonds.
According to the Pleasanton Managing Partner for Vavrinek, Trine, Day & Company, LLP (VTD),
Terri Montgomery, there is almost nothing other than spending outside of the original bond
language, and spending on general fund (education) type activities.
The Districts bond language is written so broadly that almost anything spent on a District capital
asset could apply. She agreed that neither going against Board directives, spending outside of Board
authorizations, not informing the Board of spending, or breaking the law in program spending
would violate the Proposition 39 language.
From page 48:

Based on the result of our test, it appears that the District appears to be in compliance with
the requirements of Proposition 39 for Measure D (2010) and Measure (2012) bond funds.

To say that District spending is compliant with Proposition 39 is to say very little. It isnt nothing
because the District was put into State receivership in the 90s after using capital loans for general
education purposes.
Most of the observations in the draft audit seem to be equally broad, mostly asserting that the
District is not actively breaking the law. From three pages later:

Based on the review the District appears to be in compliance with the laws and regulations
in its handling of claims on bond funded construction projects.

Even though these two sections claim that the District has been effective in controlling these two
areas, the documents included in the 2015 Updates section would not support these conclusions.

Change Orders (CO)

District personnel, in particular Executive Director Bond Finance Mark Bonnet, have identified
unprocessed proposed change orders (PCO) have a key issue in estimating future cash flows.

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At our Sylvester Greenwood HS (formerly Gompers/LPS) project we have a construction manager

and two project engineers. The second project engineer is there to get the back log of unprocessed
PCOs input into the Primavera project management system.
There is an additional problem in that many of the PCOs that are in the system, have been put in
without a cost, even when a cost could be reasonable estimated.
Because VDT did their field work in January 2015, many of the PCOs that may not have been
processed by the end of fiscal 2014 were processed by the time of their field work.
FYE 2015 CO created in Prior Years.pdf
This is a list of changed orders created in the 2015 fiscal year that were PCOs in the prior fiscal
year. The date for the change orders is given in the CO Date column. The creation dates for the
associated PCOs are in the First Entered column.
This schedule under values the amount of current year COs that were initiated in prior years since
some of the construction managers (CM) track PCOs outside of the Districts Primavera system and
are therefore unable to be reported on. Still, it is $1.3 million.
Coronado, Greenwood, and Korematsu open PCOs.pdf (3 documents)
These are three documents showing the open (not processed into change orders) PCOs at the
Coronado, Greenwood, and Korematsu modernization projects, totaling $1.9 million. Of the two
pages of Korematsu PCOs, over 55 have not been assigned a cost. And as long as Greenwood
requires a second project engineer we know that there is backlog of unprocessed PCOs there.
Coronado, Greenwood, and Korematsu are more typical than unusual for District modernization
projects.

Check Register
All the schedules presented in this section are based on the AP Check List report that has been
presented at the last two CBOC meetings. The report used listed all checks for Fiscal 2014 for Funds
21 and 35, and is included in the electronic files as AP Check List by Check.pdf. A version that is
sorted and subtotaled by vendor is included as AP Check List by Vendor.pdf.
During the last fiscal year the District had problems with two major vendors affecting the Bond
Program. The first was CDW, and can be seen in the included payment reports. CDW is the principal
installer for the Districts WIFI installation program, as well as many of our other technology roll
outs. At one point in the year they told the District that they would not continue work because of
non-payment of past due invoices. The District did manage to pay them enough to have them
continue working on the technology projects.
The second vendor that the District has had problems with, again because of the Technology
Department, was AT&T. Without understanding the source of the conflict (my understanding is that
it was not related to bond projects), the District had to switch cell phone vendors, and AT&T has not
been as cooperative on construction projects.
From page 48 of the Agreed Upon Procedures

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Based on the result of our test, it appears that the District appears to be in compliance with
the requirements of Proposition 39 for Measure D (2010) and Measure (2012) bond funds.
In addition, the payments to the vendors and contractors appear timely.

Average Days to Pay by Object

This is a summary by object or object type of the average days to pay invoices.
Average Days to Pay by Vendor
This is a summary by vendor of the average days to pay invoices.
Invoice Payment Aging
This is an aging of how long it took to pay invoices by vendor. It is similar to a normal accounts
payable aging, but for the entire year, not a single point in time, and shows the total time to pay.
Top 10 & Bottom 10 Avg days to pay.pdf
This is a single page schedule that shows the ten quickest and ten slowest vendors paid, from the
group of all vendors that were paid more than $100,000, and had more than five invoices paid in
fiscal 2014.
You can see that CDW Government Inc. was the fifth slowest paid of the group. SGI is the ninth
quickest paid.

Lance Jackson
Mr. Jackson is not only the former manager in charge of SGIs contract with District, and the SGIs
current Chief Operating Officer, he has continued billing the District for his time spent on the Bond
Program, and has an office at the Districts SGI location (1400 Marina Way South, Richmond)
jackson-gets-30000-mon.pdf
According to Oakland Unified, as Chief Operating Officer of Seville, Jackson is ultimately
responsible for the companys work in West Contra Costa. But the company is not
implicated in the investigation of mismanagement, and Jackson has not been involved for
five years in day-to-day oversight of construction in that district, according to OUSD.
WC-1001-1214049.pdf
SGI invoice for program management for December 2014, dated January 6, 2015. Lance Jackson is
billed for 35.2 hours.
WC-1001-12214049.pdf
SGI invoice for program management for January 2015, dated February 3, 2015. Lance Jackson is
billed for 30.4 hours.
SGI Offices.jpg
This is a picture of four of the five offices SGI uses at the 1400 Marina Way South building in
Richmond. The picture shows three offices (the first one on the left is mostly cur off), a conference
room, and a darkened office on the wall facing the camera.
Mr. Jacksons old office is the darkened room on the far wall, his current office is the middle one on
the left (below the exit sign, to the left of the clock).

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Master Planning Projects

On February 6, 2013 the Board approved master planning projects at five schools, Cameron ES,
Lake ES, Olinda ES, Riverside ES, and Shannon ES. Master planning means that architects get money
to meet with school personnel, local parents, and other interested parties, in to develop a
conceptual design for a new school.
It was clear at the time of creating the budgets, and awarding the contracts, that these schools
would not be rebuilt in the current decade, and probably not ever under any currently planned
revenue scenario, including Measure H passing in 2014.
Measure 2010-D and Measure 2012-E Bond funds were already completely claimed by the 2010-D
projects, 2012-E technology projects, and expected administrative costs.
20121211_FSC_Minutes.pdf
Item D.3, page 4.
The architects for three of the schools were introduced to the school principals and the selection
process was explained.
20130108_FSC_Minutes.pdf
Item C.2, page 4.
The master planning budgets are approved in the Facilities Sub-Committee.
20130206_BOE_Minutes.pdf
Item C.15, page 3.
The new budgets were approved as part of the total consent item budgets.
20130206_BOE_Packet.pdf
Item C.15, pages 54-55
The master planning projects can be seen in the first section on page 55 with the reference of
Architectural Fees (Placeholder).

Msr M Munis Projects

One of the problems that the program has is that no modernization projects are ever really closed. I
was actually told this by Juan Garrahan of SGI. This means that the District is able to start projects
at most school sites without Board approval, since most schools have had a modernization project
at one time or another.
The Measure 2000-M bond funds have last had a bond sale in 2003, stopped getting charged to in
2006, were closed out in 2011, and are now fifteen years since they were authorized. We are still
creating projects that are part of the Measure 2000-M project group.
Msr M Seismic.pdf
This is a pivot table based on a Munis general ledger export of the two seismic projects created in
the Measure 2000-M projects. Because the export report is designed to show project numbers in

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the same format as Primavera, the two project numbers are easy to read. They are 11601002-06
and 15001001-02.
Project Detail History Munis.pdf
This is a Munis report showing two Seismic projects created in two Measure 2005-M modernization
projects at Downer and Riverside elementary schools.
The project numbers in Munis need to translated to be readable (see the Project Number list in the
appendix). The two Munis numbers are 01002-11606 and 01001-15002. Munis also has an
unneeded string, 97455860, and a cost code, 324XSPC. The four segments are a cost string, which is
the only source of a project name in Munis. This problem is an artifact of how the system was set up
and can be corrected.

Project Ledger Reconciliation

The Agreed Upon Procedures portion of the performance audit does acknowledge that there is a
problem with the Munis accounting system.

In addition, issues were noted regarding inaccurate information reported from the
Primavera system. It was reported that there were approximately 20 master projects
reported in the Munis system were not included in the Primavera system, the discrepancy is
approximately $6.5 million.
Unfortunately both the amount and the cause are in error. The Primavera reporting system
gets all project costs directly from the Munis project ledger. The $6.5 million error resides in
the Munis project ledger, along with an additional $1.2 in other errors.

Re_Audit Subcommittee.pdf
This is an email reply explaining the current project leger reconciliation, and a summary of what it
would take to fix the errors.
Project Ledger Summary Reconciliation 2014.pdf
This is a report on the Munis report server giving the Project Ledger reconciliation by either fiscal
year, or by program to date. This reconciliation was printed for the 2014 fiscal year.
Here you can see the four errors that cause the total $7.7 million reporting discrepancy: Amounts
posted to the G/L only, Project amounts not in Funds 21 and 35, project transactions posted to
Period 0 (year 0, period 0), and Unpaid amounts not included in Project Summary.
To report only a $6.5 million error VTD had to have ignored the second largest error group. The
$6.5 million error also is probably a result of how contractor retentions are paid or reported.
District management, to my knowledge, has not looked into it since it was reported to them in
January 2015.
Project Ledger Summary Reconciliation 2015.pdf
This is the same report for Fiscal 2015. As you can see there are more error types, and they are
larger. The errors large arise from not posting journal entries to the project ledger, problems with
payroll posting or setup, and contractor retentions.

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The Unposted project amounts and Prior year ending balances sections are not errors per se,
but are reconciling items in order to arrive at the Munis project ledger ending balances.
Project Ledger Summary Reconciliation Program to Date.pdf
Because the Bond Program, and subsequently the project ledger, is multi-year, the reporting errors
are cumulative. This report shows the reconciliation for combined fiscal year of 2014 and 2015, or
July 1, 2013 to present. The total combined errors are approximately $60 million.

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