Accountant finds $21 million error, revealing $7 million in unused funds

by Yohana Gebre

Several faculty members and trustees spoke out against a $21 million “financial error” at the Peralta board meeting Jan. 23. The mistake, which appeared in the PCCD audit report, was “an accounting error by Peralta financial members,” according to Jeffrey Heyman, Peralta district public information director.

It is unclear to Heyman what preventive measures the District is planning to enforce so the mistake doesn’t repeat itself. 
Brandon Harrison, a California certified public accountant hired by the district, said the missing money was mistakenly reported as revenue but was actually expenditures, which led to an underspending of the budget up to $7 million.

At the Peralta Board of Trustees meeting, several faculty members and trustees were critical of the mistake and demanded that a plan be put in place so this will not happen again.

“We are lacking, very seriously as a district, internal controls not only in finance and budget but enrollment management,” Peralta Trustee Julina Bonila said at the meeting. “I implore the chancellor and his staff to take a serious look at this…in the very very near future”

The district counts full-time students (FTES) to determine its budget for the academic year. In past years, the district has set the budget much higher than realistic standards, resulting in class-cutting and faculty members not getting paid, stated District Academic Senate President Cleavon Smith.

Smith said that the district should do a much better job at setting their target. He explained that most people think that the audit report directly affects class cuts, but it is really based on the district’s inability to properly budget for FTES.

“Class cuts are not based on the audit report…class cutting is happening because the number set target is too high,” said Smith. “There is a growing lack of confidence [in the District]”.

Peralta Federation of Teachers (PFT) Part-Time Faculty Representative Brad Balukjian saw the district’s recent budget woes had resulted in wage disparity among faculty. “Seventy percent of Peralta faculty are part-time and get paid 81.5 to 97.5% of what a full-timer makes,” Balukjian said. In reality, part-time teachers are paid between 52% and 73.5% of what full-time teachers are paid in the PCCD. The longer a part-timer has been at a Peralta college, the less they are paid in proportion to full-timers.

When a class gets cut, students are left to find a replacement at the last minute that may not be available, thus prolonging their graduation date. This also leads students to miss out on opportunities to explore different fields and faculty are left without paychecks since they get paid after they perform a service, such as teaching.

According to PFT President Jennifer Shanoski, full-time faculty are guaranteed a certain number of the same level of security. “[Part-timers] are going to multiple offices, [with] no job security, no benefits, no tenure, no office hours,” Shanoski said.

To start the meeting, Shanoski said that faculty were concerned with tax money and that the 50% Law isn’t being followed. The 50% Law states that within the fiscal year, half of the district’s general funds have to go toward the expense of instruction. The rest is diviied up for the other needs of the college.

“From [the PFT’s] analysis, the Parcel tax isn’t being used for instruction, but instead shoring up increased administrative costs coming out of Fund 1,” Shanoski said, and explained that Fund 1 is Peralta’s general fund and doesn’t have any restrictions on how the money should be spent. “The spirit of the language is not being followed,” she said.

Shanoski said that more money should go towards offering classes, and too much of it is going towards administration and consultation.

Smith believes that the result of these accounting errors has led to a drop in morale among Peralta’s faculty. “There is a general sense of apathy and cynicism among some staff,” Smith said.

CORRECTION : In our Feb. 1 print issue, we ran a quote from Brad Balukjian about part-time to full-time salary proportions for teachers that could be misleading. As the story above adds, part-time teachers are paid between 52% and 73.5% of what full-time teachers are paid in the PCCD. The longer a part-timer has been at a Peralta college, the less they are paid in proportion to full-timers.

Yohana Gebre is a Tower staff writer.