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Uploaded: Wednesday, October 31, 2012, 11:27 AM
Hanretty aftermath: School districts take steps to prevent future financial misdeeds
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By Barbara Wood
Special to the Almanac
While both the Woodside and Portola Valley school districts have put measures in place to try to make it more difficult for their funds to be misused in the future, officials emphasize that the crimes former school official Tim Hanretty has confessed to were sophisticated.
Mr. Hanretty, the former Portola Valley School District superintendent and former Woodside Elementary School chief business official, was sentenced to two years in prison on Oct. 22 after pleading no contest to six felony charges of embezzlement and misappropriating public funds in both school districts.
Mr. Hanretty "was able to snow two distinguished districts," said Scott Parker, head of the Portola Valley district's board. "These are really sophisticated boards full of people who have been serving for a number of years."
If the Woodside district had not discovered the loan improprieties, "I don't know whether (the Portola Valley embezzlement) would have been found. He was very, very good at hiding things," Mr. Parker said.
For example, the Portola Valley district already had in place a system of independent audits. Unfortunately, the audits were presented to the chief business officer, who was Mr. Hanretty, and not directly to the board.
"It's not a matter of not looking into the documents," Mr. Parker said. "We're reading every page and that's still not enough."
In hindsight, district officials say, it may not have been the best idea to combine the jobs of chief business officer and superintendent, or to share one person, as the districts did for many years. At the time, however, the decisions had widespread support and were seen as money-saving. "It was actually something that nobody opposed," Mr. Parker said.
"We thought we were being quite efficient," said Woodside board member Bettina Pike.
Both districts say they have completely revamped the way they keep track of money.
"We really have changed our entire accounting structure," Mr. Parker said. "What we've added is additional ways for the board to have clearer eyes on our actual financial picture, rather than an interpretation of it."
"I think we're just starting with a clean slate," said Ms. Pike, who is the board member who first asked the questions about the district's debt service that led to discovery of the unauthorized $2 million loan. Woodside plans, for example, to use an outside project manager for any future bond projects, she said.
Woodside district superintendent Beth Polito said the district is "making sure an independent financial audit is completed in a timely manner and that it is reported to the board in an open session every year."
In Portola Valley, Superintendent Carol Piraino said the district has formed an advisory committee made up of parents, representatives of the Portola Valley Schools Foundation and teachers; established an audit committee, which also has representatives of these groups; and begun using the San Mateo County financial systems for purchase orders, position control, and payroll to prevent the district from spending money it does not have.
In addition, Ms. Piraino said, all purchase orders over $15,000 must now be approved by the school board.
"All of these practices have put checks and balances in place to ensure that we, as a district, live within our means," she said.
Stephanie Ashworth, the former Woodside School Foundation board member who worked with Mr. Hanretty, said she has learned something from the experience that both districts might heed.
"I think for me the lesson learned (is) you never give one human being too much power in an organization when finances are involved," Ms. Ashworth says.
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Posted by Resident, a resident of the Portola Valley: Westridge neighborhood, on Oct 31, 2012 at 12:48 pm "Mr. Hanretty 'was able to snow two distinguished districts,' said Scott Parker, head of the Portola Valley district's board. 'These are really sophisticated boards full of people who have been serving for a number of years.'"
Sophisticated boards - really? These "sophisticated boards" appear to have completely ignored standard auditing and accounting practices.
Of course, Mr. Hanretty is completely responsible for his own illegal actions, but the people overseeing Mr. Hanretty also need to take responsible for their actions or lack thereof. Continuing to think they were "sophisticated" shows they still don't get it. Nothing about the procedures they had in place was sophisticated.
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Posted by Agree, a resident of the Portola Valley: other neighborhood, on Oct 31, 2012 at 1:32 pm I have to agree with Resident's comments. Every small company, organization, and charity has too few people to oversee the books. You rely on the auditor and the system to minimize fraud. If the Board never spoke to the independent auditor and there was not a purchase order system in place to catch fake invoices to a contractor/employee who never did any work for the school district, don't merely blame the criminal. We all make mistakes and have been taken advantage of by con-men in some shape or form. Admit the mistake, put systems in place to prevent further issues and learn. Continuing to blame the sophication of the criminal is not and should not be the issue going forward. If the Board cannot accept thier part of the responsibility, move on and do something else. Bake cookies for the class haloween party!
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Posted by Agree 2, a resident of the Portola Valley: Central Portola Valley neighborhood, on Nov 1, 2012 at 5:35 pm The 5-member "sophisticated" Portola Valley Board has 2-3 Stanford MBA's sitting on it at any given time (currently 3), yet there was neither an audit committee nor a budget committee in place under Mr Hanretty.
Were there such committees under his predecessor, Anne Campbell, current San Mateo County Supervisor?
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Posted by Susan Smith, a resident of the Portola Valley: other neighborhood, on Nov 1, 2012 at 5:59 pm I also agree with Resident, the poster of the first comment. I am a little surprised there is no lawsuit posted against the members of these School Boards:: They are part of the check and balance systems citizens rely upon, and who are elected,or appointed, to fill these functions by stating their own qualifications. Maybe the voter ought to be more careful, as well.
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Posted by Tina, a resident of the Menlo Park: University Heights neighborhood, on Nov 3, 2012 at 9:44 am Just because Tim happens to be gay everyone wants to bash him. He has suffered enough already. The board in their hubris shares some blame. It's too bad the MBA s lack common sense. The entire board should resign and start over.
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Posted by Disagree, a resident of the Portola Valley: other neighborhood, on Nov 3, 2012 at 3:21 pm I disagree that Tim has suffered enough already. I refute the comment that 'everyone wants to bash him' because he is gay. He carried out criminal acts. He hid his thefts from the Board. We trusted him, and he betrayed us, our children, our volunteers, our teachers, our district employees. He created immeasurable stress and strain on families in the district. People lost their jobs. Parents lost time with their families as they tried to sort out the mess he had created. He denied culpability for months. The school board cannot be held responsible for his lies and deceit, they trusted him, as we all did. We believed him to be an honest man who cared for our children and staff. We were all wrong.
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Posted by POGO, a resident of the Woodside: other neighborhood, on Nov 3, 2012 at 6:12 pm I believe that California (and most other states) law provides immunity for elected officials for acts performed in their official capacity. It does not immunize them for deliberate acts such as fraud, but does cover them for negligence.
I doubt any members of the school board could be sued for failing to pick up this deliberate act of fraud committed by an employee. And if you did sue them, who in the world would ever run for office?
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Posted by Trust, a resident of the Portola Valley: Portola Valley Ranch neighborhood, on Nov 3, 2012 at 7:33 pm The Boards may trust, but they must verify.
There was no "verify."
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