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Flaws Found in School Bus Cooperative's Books

January 15, 1987|SUE CORRALES | Community Correspondent

WHITTIER — Auditors have found evidence of unpaid bills dating back to 1984, an inefficient bookkeeping system and lax internal controls in their examination of the Pupil Transportation Cooperative's books for the fiscal year that ended last June. They also reported about $80,000 in unrecorded liabilities.

The 2 1/2-year-old cooperative has risked financial "irregularities in amounts that would be material," said the report by the Pasadena accounting firm of Guill, Blankenbaker & Lawson. Tom Willis, auditing firm partner, said shortages of uninventoried equipment may have gone undetected.

The report recommends that the district's spare bus parts and mechanics tools be inventoried and controlled. "If I worked here as a mechanic, I could be taking tools home," said Chris K. Lyda, budget and accounting supervisor for the cooperative. Lyda, who joined the district in July, said he will begin inventorying tools after the cooperative's board of directors accepts the report. Acceptance is expected Jan. 22.

$2 Million Annual Budget

The cooperative transports students in the Whittier City, Whittier Union, El Rancho Unified, Los Nietos, Little Lake and South Whittier school districts. It has 53 buses and an annual budget of about $2 million. It is governed by the business managers of the member districts.

Most observers place blame for the problems on former managers who they say knew little about finances. Until Lyda joined the transportation cooperative, no one kept ledgers or followed up to see if accounts receivable had been paid, he said.

Virginia Barnes, who became director of the cooperative in January, 1986, called the audit "very factual and thorough." She attributed the tangled books to "innocent mismanagement" and "the difficulties of establishing a new entity."

The six-district cooperative began transporting students in the fall of 1984. It was conceived as a cost-saving measure for member districts and has, in fact, saved member districts $270,000 in the first two years of operation, according to William M. Purdy, a member of the cooperative board and business manager for Whittier Union.

But while the cooperative has had problems, he said, "I think we've made tremendous strides. We still have a ways to go."

Withdrawal Considered

Last month, Whittier City School District considered withdrawing from the district on the recommendation of Connie Fong, district business manager. Fong told the board that it could save money and improve service by operating its own system. Board members decided to stay in the district, partly because of reports that service is improving.

Pursuing the auditors' investigation further, Barnes and Lyda found that the unrecorded liabilities actually amount to $93,500 but are mostly offset by $77,500 in uncounted and miscounted assets. District officials also found a $50 shortage in the petty cash fund.

Willis attributed the cooperative's most serious trouble to breakdowns in "a dual accounting system," whereby the Whittier Union High School District would pay bills on behalf of the cooperative. Barnes and others say the cooperative was responsible for the problems.

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