Editorial: Alleged embezzlement hits schools hard | June 20, 2012 | Almanac | Almanac Online |



Viewpoint - June 20, 2012

Editorial: Alleged embezzlement hits schools hard

After months of speculation about whether Tim Hanretty, the former superintendent of the Portola Valley School District, had somehow managed to misappropriate school funds for his own use, acting superintendent Carol Piraino announced late Friday that Mr. Hanretty has been arrested on charges of embezzling funds from the district.

The announcement was based on information provided by an independent audit. District Attorney Steve Wagstaffe said Mr. Hanretty is being charged with seven counts of embezzlement of public funds from the school district. He is accused of seeking reimbursement from the district for $100,926 in work done by a contractor on his personal residence.

The former superintendent, who posted bail and will appear in court Tuesday, June 19, also faces misappropriation charges related to his financial work at the Woodside Elementary School District.

Although the embezzlement charges may explain part of what happened, they don't help parents understand much greater losses. The school board is looking at a package of $2.1 million in spending cuts to balance the budget. Earlier this month, the school board was forced to obtain a bridge loan from the county Board of Education to help with cash flow until September, when the funds must be repaid.

In meetings prior to the announcement of embezzlement charges against Mr. Hanretty, many parents were concerned about the board's continuing refusal to explain how such a huge amount of cash could go missing undetected by trustees. The board remained silent during much of a meeting earlier this month as speakers in the audience sought information, but finally, board member Ray Villareal spoke up.

"For all of us on the board it was pretty awful to learn" about the surprising losses. He acknowledged that board members realize "we haven't collectively done the job we needed to do."

Most parents would regard that as an understatement. We agree. The board needs to explain how the district wound up with a $1.65 million deficit in a budget with with an expected $11.4 million in revenue.

Certainly Mr. Hanretty was a prime suspect after he resigned as superintendent in January as the district attorney's office investigated his questionable handling of finances when he was financial officer at the Woodside Elementary School District. He began his tenure ast Portola Valley schools as superintendent in mid-2010.

Before charges were announced against Mr. Hanretty, Mark Bonnett, the district's interim financial official, said understanding the scope of the financial problem has not been easy. He said recently that figures change frequently, as auditors "keep finding things under rocks."

Now many of the "extras" students and parents expected will be missing unless an unexpected infusion of funds materializes in the 11th hour.

To ward off insolvency, the district is expected to act on a package of potential savings at its June 20 meeting. Cuts could come in many areas, such as dropping summer school and K-5 Spanish; reducing or eliminating contract technology staff to save $84,000; cutting the facilities maintenance budget by 25 percent to save $25,000; cutting all supply budgets 15 percent to save $58,300; reducing district office staff to save $30,000; and eliminating $25,000 in funding for the eighth-grade trip.

More drastic cuts would require agreement with employee unions, including a salary freeze to save $110,032; elimination of up to 10 school days to save $300,000, and elimination of the summer technology institute for teachers to save $28,000.

School families can only hope that the most draconian budget cuts can be avoided. In hindsight, it seems that a vigilant board should have detected the former superintendent's apparent attempt to pay for his home improvement project out of a solar project fund. But this organization, like many others, operates on trust. In this case, the checks and balances between board members and top executives clearly were not enough. Let's hope the board members are more vigilant in the future.