The idea that Denair's Superintendent Edward Parraz was too compassionate to make hard decisions, and specifically didn't want to lay off employees and thus is mainly responsible for the district's financial problems, is not supported by the report generated by CPA Teresa Ryland who, as required by state law, examined the district's financial planning, status, and history. Her job was to determine how Denair became one of seven districts out of 1,107 in California to receive a negative certification this year; they cannot pay their bills.
The story, as she described it, is much more complicated, happened over an extended period of time, and was reflective of general poor fiscal management by the district's CBO and the superintendent. Her audit found inexplicable over estimates of attendance and developer fee collection that hid the true fiscal status of the district. She found a lack of ongoing public monitoring of the budget by the School Board. She questioned the accuracy of the district's budget reports and system of reporting fiscal status and budget transfers to the board and public. County warnings cautioning the use of one time Federal bailouts and the dangers of ongoing deficit spending transmitted to the district were evidently disregarded. She found that the district was actually hiring more people when its base student population and resources were declining, negating the effect of retirement attrition. Since position control and program fiscal monitoring was not addressed properly by the CBO, programs were allowed to run in the red at the expense of other programs.
When other districts were consolidating schools and administrative staffing, Denair divided its single elementary school of about 550 students into two schools requiring duplicate administration and office staff.
Even after the Board declared a hiring freeze three or four years ago, the administration continued to hire numerous certified and classified administrators, teachers, and other classified staff increasing the total number of staff. For example, in school years 2010-2011 and 2011-12 the district added nine teachers to its staff. Six or seven of those positions could have easily been filled with existing staff with no impact on the educational program.
Evidently the superintendent’s compassion extended to people in the community who didn’t have jobs. What happened at Denair was a perfect storm. As reflected above, 1,100 Districts' CBOs did a great job, as they always do, keeping their districts out of trouble. Denair's CBO either did not know how to manage the district resources or she didn't have the courage and or authority to forcefully oppose the superintendent's decisions. The superintendent was willing to “roll the dice" with the future of the district, believing that hundreds of students would suddenly materialize if he offered more programs or hoping for another bailout. The board's lack of oversight and hidden deliberative process negated the checks and balances that would have prevented the equivalent of school district bankruptcy in almost any other district.
— Larry Hoyt