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Computer Bill Held Liable for District Deficit

July 26, 1987|ELIZABETH CARAS | Times Staff Writer

WEST COVINA — Almost half the deficit that required the school district to obtain an emergency loan from the state was caused by the unexpected expenditure of about $1.3 million to remedy computer problems, according to school officials.

Members of the West Covina Unified school board were aware that the district was having problems with its computer system, but it was not until last month that they discovered how much had been spent on the problem, Kathleen J. Jones, board president, said last week.

"There was no indication that the computer system was causing this kind of deficit," she said. "It's unbelievable that those kinds of moneys were being expended and that information was not shared with the board."

Other Problems

The turmoil over the cost of reprogramming the computer system is the latest in a series of problems that have plagued the district over the last few months. School officials announced in May that the district faced an unexpected deficit of at least $2.7 million in its $27-million budget for the 1986-87 school year.

Two of the district's top administrators, including the superintendent, were placed on paid leaves of absence.

The state Legislature approved a $3.9-million loan last month to help the district meet its expenses and ensure that classes would continue until school closed on June 18.

Final figures will not be available until next month, but the deficit is expected to be between $3.2 million and $3.6 million.

As a result, the district must cut expenditures for the next school year by about 10%, Jones said.

The board will begin examining where those cuts might be made at a meeting on Tuesday at 8 p.m. in the board room of the administration building, 1717 W. Merced Ave. Jones said the process will be a difficult one, because the cuts will affect virtually all school departments and activities.

"The morale is really low because we know the cuts are coming," Jones said. "We're going to have to cut to the bone and there's no way to soften that."

School Administrators Blamed

Jones blamed top school administrators for the computer expenditures, saying that the district expected to pay only about $350,000 a year for maintenance costs. Instead, Dallas-based Lawson Associates Inc. was paid $100,000 a month over a 12-month period.

Although administrators said they were pleased with Lawson's work, a contract with the company was terminated on June 30 because it was too expensive, said Billy J. Barnes, assistant superintendent for educational services. He said the company had almost finished its work.

Jones said the district began having problems with the comput er system almost immediately after it was purchased in 1982 from the Burroughs Corp. for about $470,000. The district bought the system for storage of records and administrative tasks.

"Burroughs did not provide us with a system that they specified in their contract," she said. "It didn't work."

Michael Mason, western regional vice president of Unisys Corp., formed when the Burroughs Co. and Sperry Co. merged, was out of town and unavailable for comment, and Michael Erlich, director of marketing operations, did not return phone calls.

Because the computer system did not meet the needs of the district, which serves about 8,000 students in West Covina and part of Valinda, Jones said officials had to purchase additional equipment and pay for consultants to work with the system.

Burroughs would not correct the problems, Jones said, and in 1985, it settled with the district out of court. Burroughs paid the district $350,000, waived a balance of $135,655 owed to the company and allowed the school system to keep much of the hardware.

District officials refused to elaborate on the specifics of the computer problem. All questions regarding the computer system were referred to Jane E. Scott, a business consultant working at the district for 60 days. Scott declined comment.

At the time, Jones said she thought the settlement was beneficial to both parties, because it averted a court battle that could have lasted up to five years.

But she said she would not have agreed to the settlement if she had known of the $1.3 million in reprogramming costs that would be necessary to upgrade the system so it would meet the needs of West Covina.

The school district has spent more than $1.3 million to upgrade the computer system, but only that amount was in excess of what was budgeted, school officials said.

The computer problem only contributed to the deficit, said Donald A. Driftmier, a certified public accountant for a firm that audited the district's books.

Because of a poor monitoring system, expenditures that were not budgeted went unnoticed, he said. "The computer is just part of it," he said. "It's part of many things that happened."

Inadequate communication between district officials and the school board also contributed to the financial problems, Driftmier said.

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