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Over 500 credit card transactions totaling to more than $200,000 were reviewed in Las Lomitas Elementary School District’s extraordinary audit after public records found that district officials were using public funds for extravagant trips and thousands of dollars on meals. Auditors said a lack of district policy governing such expenses, and the lack of receipts for charges, made it difficult to investigate whether all the expenses were justified.
In April, the San Mateo County Office of Education commissioned the Fiscal Crisis and Management Assistance Team, an independent state agency, to review whether the district’s credit card use and employee leave were in compliance with Education Code and board policy. The audit was to determine if fraud, misappropriation of funds and other illegal practices occurred.
The county received FCMAT’s report on Oct. 30 and it was presented by County Deputy Superintendent of Business Services Kevin Bultema during a LLESD school board meeting on Nov. 5.
According to Bultema, the team found insufficient evidence to determine that there was “willful intent to commit wrongdoing or to conceal or misrepresent actions in order to misuse the district’s leave policies or procedures.” Additionally, there was not enough evidence to show fraud or misappropriation of funds had occurred under the direction of former Superintendent Beth Polito.
“Numerous deviations often indicate significant internal control deficiencies and weaknesses,” writes the report.
Auditors interviewed employees for more information on transactions that had insufficient evidence and lacked supporting documentation to prove its educational purpose.
Bultema reported that FCMAT’s findings indicated any unusual use of credit cards was a result of a lack of detailed board policies, administrative regulations and consistent guidelines on how credit card purchases should be authorized. Auditors also found that there are “deficiencies in policies related to employee leave,” including a complete lack of board policy related to sick leave.
Results of the audit
The audit looked over the transactions of six employees over a 33-month period, including Polito.
As part of the review, FCMAT evaluated each of the 504 sampled transactions and determined whether they passed or failed the agency’s five testing criteria. These include evidence that the expenditure log was signed by the employee, a supervisor, described for educational purposes or of reasonable matter, and filed with the statement and logged in a timely manner.
According to the report, 76% of the transactions failed to meet at least one criteria. If a transaction fails to meet any of the five testing criteria, it can mean that the auditor is not able to make a determination about the validity of the transaction due to missing information and documentation.
Transactions that were recognized as potential gifts of public funds included $5,775 used for retirement parties, flowers, gift cards, custom birthday cakes and condolences. Twenty-six transactions failed to meet criteria that were determined to serve an educational purpose.
Retirement party expenditures included $1,035 and $3,004 purchases from Left Bank, a French restaurant in Menlo Park and multiple purchases from Draeger’s supermarket for staff events. A $160 birthday cake charge was also included in a Dream Inn hotel invoice of $10,812, described as part of a district’s annual leadership summer retreat. According to the employee, staff were not allowed to bring a cake from outside of the venue, forcing them to purchase one from the hotel.
Many of the hotel expenditures were described as serving an education purpose as team building, educator conferences and networking opportunities.
Among the reviewed transactions, auditors found that 156 were missing receipts with a total value of $63,018. The audit also looked over 57 credit card statements of which 18 were missing an expenditure log form.
“The team found that the log form is not always used, often incomplete, and missing employee and supervisor signatures,” according to the report.
Board member acknowledgements
The LLESD Board of Trustees commented on their appreciation for the work that was done by the county and FCMAT to produce the extraordinary audit report.
Trustee Heather Hopkins, who served as board president last school year, shared an overview of how the events that led to the audit transpired in November 2024. During the heat of labor negotiation, the community began to share its concerns about Polito’s spending to the board, she said.
After the district received a public records request for credit card statements in October 2024, Hopkins recalled adding a discussion of an audit to the very next meeting. Soon after, the board suspended Polito’s use of credit cards, formed a budget advisory committee and later placed Polito on administrative leave.
As the board waited for the FCMAT audit to be completed, Hopkins said she took the initiative to research and craft policies around administrative regulation credit card use, which was approved by the board last month. Hopkins added that she would like the board to also ensure it has detailed guidelines for reimbursements.
Trustee Kimberly Legg acknowledged the district’s mistakes, insufficient policies and carelessness as she recognized the frustrations that the lack of transparency caused the community.
“Systems in place did not provide the oversight and accountability that our community deserves,” Legg said. “We as a board are fully committed to ensuring that this does not happen again. We’re owning the fact that the system did not work the way it should have, and we’re rebuilding the system thoughtfully and publicly.”
The school board is expected to create a corrective action plan within 15 days of the presentation. Board members will be meeting in a public session on Nov. 18 at 2 p.m. to discuss its plans, which are required by the county to be implemented within 120 days.
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This article is missing vital and critical context: these crimes (yes the state says there is not enough evidence but that is because they are buddy-buddy with the district) were only uncovered after The Almanac’s investigation. Truly, this article is missing the praise and pride The Almanac should feel. It would not have happened without them. I request an Editor’s Note acknowledge the work former reporter Ardan Blum put into investigating the District and getting them to admit the issue. Hopkins refused to acknowledge Polito’s impropriety until it was plastered on the front page.
Totally agree. If it were not for the investigative reporting by The Almanac , Polito would still be spending district money on Michelin-starred restaurants and four-star hotels. On a side note, the Almanac’s November 13, 2024 credit card analysis and the follow-up January 16, 2025 article announcing Polito going on leave, were both written by Arden Margulis.