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State Education Funds Mismanaged, Audit Finds

Finances: Report questions use of $21 million in federal money granted for teaching English to poor immigrants.


The California Department of Education mismanaged $21 million in federal funds earmarked to teach English to poor immigrants, according to a new state audit.

Instead, the Bureau of State Audits report concludes, the department gave funds year after year to organizations that had "abysmal" records for reaching and successfully teaching students.

Organizations examined in the audit are located across the state, from the Bay Area to the Central Valley to Southern California. Five of the 10, including Hermandad Mexicana Nacional in Los Angeles and Orange County, have been under federal investigation for more than a year, as has the state Education Department.

The other five, selected to represent a cross-section of all groups receiving English-as-a-second-language adult education funds, also had serious problems that were ignored, the audit concluded.

One glaring problem the audit found was "highly questionable" attendance records in eight of the 10 organizations. In one case an organization submitted records claiming a student had taken classes averaging nine hours a day for 365 days straight, including two classes held at the same time.

Another submitted forms showing classes had been taught on Labor Day, Thanksgiving, Christmas and New Year's Day.

State education officials said the audit, requested last year by the Legislature, failed to acknowledge steps they have taken in the last 16 months. They also said the 10 organizations reviewed by the auditor are not representative of the 86 groups receiving the funding statewide.

"We wish the report had provided some recognition or acknowledgment in terms of the very real reforms that the department has had in place," said Education Department spokesman Doug Stone, including a new management team and stiffer regulations and reporting requirements.

The report was especially critical of Hermandad, which received the lion's share of the funds in question, $10.6 million from 1994 through 1998.

"In Hermandad's case, they clearly didn't even have the physical plant to provide as many classes as they were funded for," said Anne Campbell, head of the team which prepared the report for state auditor Kurt Sjoberg.

State officials ordered Hermandad last year to pay back $4.3 million in federal funds that it could not properly account for. Stone said state education officials are reviewing additional records provided by Hermandad last summer.

Hermandad officials have long denied any wrongdoing. On Wednesday, Hermandad Executive Director Bert Corona said the group has helped more immigrants become citizens than any other organization in the state. "How did they pass the [citizenship] tests, if we didn't teach them?" he said.

Hermandad development director Angelina Casillas said the organization continues to hold classes for immigrants without state funds.

"That's one of the things we feel very proud about: keeping the services and the performance at the same levels as previous fiscal years, without the state Department of Education," said Casillas. She said developer fees from housing projects had helped offset the lost funds.

Daryl Thomas, legislative assistant to Sen. Ray Haynes (R-Riverside), who requested the audit, said it "confirms our worst fears about the Department of Education's gross mismanagement of these public funds."

But Democrats were less harsh.

"As legislators, we're going to have to look at the audit report to see if it stands on solid ground," said state Sen. Joe Dunn, (D-Santa Ana). "If in fact there are abuses out there that need to be corrected, we'll correct them."

Assemblyman Lou Correa (D-Anaheim), who called himself "a very strong supporter" of Hermandad, said: "Obviously, nobody condones the waste of taxpayers' money." He also asked if Hermandad is being blamed for lacking records it was never told to keep.

Hermandad officials have long claimed the scrutiny of their organization is politically motivated.

Other groups examined--along with funds received--were: One Stop Immigration Service, Los Angeles, $2.7 million; Templo Calvario Legalization and Education, Bell, $2.3 million; Center for Employment Training, San Jose, $2.1 million; CT Learning Inc., Fresno, $757,000; Mexican American Opportunity Foundation, Montebello and Santa Ana, $601,000; Lao Family Community Development Inc., Oakland, $588,000; Servicentro Palmer, Pasadena, $458,000; California Human Development Corp., Santa Rosa and Oakland, $330,000; and TODEC Legal Center, Perris, $746,000.

Times staff writer Michael Luo contributed to this report.

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