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East’s fiscal mistakes

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By Optic Editorial Board

We thought the first big test of the new Las Vegas City Schools board members would be the hiring of the next superintendent. We were wrong. The first big test is in how the school board is going to handle the latest news that the district is two years behind on its audits.

In the disturbing saga of bad fiscal management in the East district, here’s the latest item to publicly come to light: The district’s audits for 2009 and 2010 are late, which is a violation of state law. That certainly sheds light on the reason why property owners were blindsided with a nearly 30 percent increase in their taxes last year, and it begs the question, Who was responsible for this? Former superintendents Pete Campos and Richard Romero are going to need to answer a lot of questions.

Given the circumstances, State Auditor Hector Balderas is right to place East on his list of “at risk” government agencies. He’s also right to point out the risk of fraud and fiscal mismanagement without yearly audits. This entire situation is frighteningly reminiscent of Highlands University’s 2001 fiscal crisis, when the lack of an audit was offset by assurances that everything was a-OK. Thankfully in East’s case, Interim Superintendent Sheryl McNellis-Martinez is offering up no such assurances, so at least taxpayers have a better chance of getting the straight story this time.

That said, being two years behind on audits is a serious breach, and East’s school board members should be demanding answers. At a meeting earlier this week, a mild-mannered discussion about the issue took place. We hope that was because board members didn’t feel up to speed about the issue, so they were reluctant to delve too deeply into the whys and wherefores. We hope it wasn’t out of a desire to keep the matter hush-hush. The public has a right to know what happened, and how the district’s money is being managed.

We think it would be perfectly reasonable for the board to call Campos and Romero in for a public grilling as to why the district is in this predicament. In fact, we think it’s critical that the district throw all necessary resources at the problem, to get it resolved as quickly as possible.

Audits, in case you don’t know, are designed to keep people honest. Embezzlement is far more likely to occur without such oversight. Ask the Jemez Mountain School District, where nearly $3.5 million was embezzled after, you guessed it, audits were left undone.

There’s good reason for the law to require school districts to undergo annual audits.

We’re hardpressed to imagine how the Las Vegas City Schools district could have allowed its financial records to fall into such disarray.

Understand that we’re not accusing anyone of embezzlement, or any other illegal activity, except for the failure to complete the audits. We’re simply saying that a serious failure has occurred, and someone needs to be held accountable for the mistakes.

This matter can’t be swept under the rug. It will be up to the new school board — with three of its five members brand new — to find out why the audits are so late, where the district currently sits fiscally, and what can be done to make sure this doesn’t happen again.