The state’s school voucher program has exhibited “a myriad of accountability problems” and caused a funding shortfall for public schools, a state audit released this week shows.

The audit, encompassing the 2024-2025 school year, was presented this week to lawmakers, who are spending the weeks leading up to the legislative session learning the woes of the universal school voucher system in which, contrary to how it was marketed, “funding did not follow the child.”

Matthew Tracy, deputy auditor general for the state, presented the to each legislative education budget committee Thursday. Tracy’s team recommended the Legislature change the timing of scholarship application windows and provide more financial support to avoid funding shortfalls.

Sen. Don Gaetz, R-Crestview, said that at any given moment the state does not know where 30,000 students are in terms of school categories — traditional public or voucher-supported private or home schools — together worth $270 million in education support.

Gaetz spearheaded an unsuccessful bill last year, , to change various parts of the voucher system.

In 2024-2025, the department paid $655 million to middleman scholarship funding organizations, as statutes prescribe, before school started. That’s part of the questioned accounting practices.

“Any improper payments, any ineligible amounts, you’re paying and chasing those amounts, because the dollar’s already gone out the door,” Tracy said.

Last month, the House held committee meetings during which members asked scholarship funding organizations and the department about miscalculations and processes. Those meetings provided initial numbers of how many students were double-counted or lost in fuzzy accounting. For example, the state’s largest scholarship funding organization sent at least $7 million to families before verifying whether their students were attending a private school or homeschooling.

Earlier this month, legislators approved a $47 million budget amendment to make up for traditional public schools shortchanged by the accounting inaccuracies at the end of the previous fiscal year, even after tapping into $118 million from the education stabilization fund, through which the Legislature can cover voucher-related budget overruns. In the meantime, some districts were caught off guard after education funding from the state ran dry.

Foreseeable for some

Sen. Jennifer Bradley, R-Fleming Island, said the audit showed “a lot of concerning information.”

“I wouldn’t say wholly unforeseeable, given the rapid expansion of the program in the last couple years — which has been a point of concern that I’ve had for many years here — is how are we going to make sure that we track students, have budget accountability, have budget predictability,” Bradley said.

In the past four years, the voucher program has grown rapidly, serving about 500,000 students during the past school year. In 2021-2022, the program had served about 200,000 students. In 2024-2025, the program dished out $3.17 billion in Family Empowerment Scholarship vouchers and recorded another $804.5 million in scholarship programs funded through corporate tax credits, totaling nearly $4 billion dollars.

In some respects, the state went “beyond” state law, but also missed “various opportunities … to further accountability over the use of State education funds and timelier and more effectively identify and halt duplicate payments and recoup ineligible amounts.”

“I’m disgusted; this is another, in eight years I’ve been here, ‘I told you so,’ and they’re just getting more and more expensive,” Sen. Jason Pizzo, NPA-Sunny Isles Beach, said.

The audit found that as of June 30, the end of the last fiscal year, $36 million sat in scholarship accounts unspent as did more than $367 million in scholarship accounts for students with disabilities.

At the end of the 2024-25 school year, nearly 300 accounts for students with disabilities held “excess balances,” or more than $50,000 each in unspent money. The sum of the excess alone was $2.3 million.

Pizzo focused on “float,” the lost value of interest that could be collected on money that is not in state hands when it could or should be.

“Certainly, you could never close out books for a company or an organization the way this is,” Pizzo said, adding that “a bunch of [Department of Education] bureaucrats just don’t understand finance. This is so bad.”

Tracy said it “was not evident that the department had sufficient staff resources to perform its critical duties.”

“I think that this is a cautionary tale to what can happen if you don’t phase things in and you don’t take the appropriate and adequate amount of time with something as transformational as this program truly was,” Senate Appropriations Committee on Pre-K-12 Education Chair Sen. Danny Burgess, R-Zephyrhills, said.

The Department of Education said it has addressed concerns raised in the audit that directly implicate the department.

“We’re trusted with these dollars, and we kept using, ‘Does the department have the authority, the authority, the authority.’ I’m left myself asking, ‘Does the department have the ability to actually reconcile these issues?’” Pizzo said.

Separate silo

Gaetz said he will introduce a bill in the coming days to address these concerns.

His bill, to be co-introduced by Burgess and Committee on Education Pre-K-12 Chair Sen. Corey Simon, R-Tallahassee, would separate the school choice scholarships from the Florida Education Finance Program (FEPF), the mechanism that funds traditional public schools, and would expand the education stabilization fund.

The auditor’s report recommended separating scholarship payments from the FEFP, making it a separate “silo” in the budget.

“The auditor general said in his meeting with the chair and myself that whatever can go wrong with this system has gone wrong,” Gaetz said.

The bill would establish monthly payments to families and schools and provide student IDs to private school students, too, a focus of House committee hearings last month.

“We do not have a perfect bill to introduce, but we have a bill which fixes these issues, which, left unaddressed, will continue to worsen and threaten to disrupt and imperil school choice in Florida,” Gaetz said.

There seems to already be a difference in House and Senate approaches.

House PreK-12 Budget Subcommittee Chair Rep. Jenna Persons-Mulicka, R-Fort Myers, said moving scholarship funding outside of the FEFP “would be a huge mistake and that would end universal school choice in the state of Florida.”

Persons-Mulicka said the problem is not the funding model, but instead the implementation of the program.

“If you change the funding model, create a new funding model, who’s to say there still won’t be implementation problems?” Persons-Mulicka said.

Included in the audit is the Department of Education’s response, which agreed with separating the the school choice programs from the FEFP.

“The Department acknowledges that, while the popularity and growth of the scholarship programs evidence their value and need, the administrative systems supporting these programs must keep pace with their implementation,” Education Commissioner Anastasios Kamoutsas wrote.

Gaetz said the program must be “partially reengineered.”

“We can’t just rearrange the deck chairs, we have to make sure that we change course in the ways that the auditor general has recommended,” Gaetz said.

is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Florida Phoenix maintains editorial independence. Contact Editor Michael Moline for questions: info@floridaphoenix.com.

An audit of the Oregon Department of Early Learning and Care found the agency could benefit from stronger oversight and equity training to improve governance of the state’s early learning system.

Auditors’ findings, issued in a letter from the Secretary of State’s audits division to agency director Alyssa Chatterjee on July 24, align in part with critiques of the department voiced by current and former staff  published in March. Employees sounded alarms — including one who contacted Gov. Tina Kotek — about what they saw as the agency’s failures to foster equity, retain leaders and manage programs that serve Oregon’s lower-income families.

Auditors  to learn more.

Their  urge agency leaders to regularly review disciplinary decisions made by child care licensing investigators to ensure they are being made fairly; expand required equity and bias trainings; and improve coordination between regional and statewide authorities and among the various preschool and child care programs that the department manages.

Agency leaders said they welcome the feedback and are already working to implement some of the recommendations.

“One of DELC’s values is continuous improvement,” said Kate Gonsalves, spokesperson for the Department of Early Learning and Care. “In particular, Director Chatterjee valued the recognition of the intentionality that went into the launch of DELC. We are proud of this intentionality and appreciative of the chance to have this review so early in the agency’s tenure.”

The audit examined how smoothly the early learning division transitioned out of the state education department into an independent agency. The Department of Early Learning and Care launched July 1, 2023, and auditors monitored its performance throughout its first year.

Rather than complete a full audit, which takes longer and typically looks at established government practices and protocols, the audits division conducted its analysis in real time, so the findings would be available to the agency in a time frame that allowed leaders to act on them, said Laura Kerns, spokesperson for the Secretary of State’s Office.

“The benefit of a real-time analysis is that we can get in at the beginning before too much has happened and provide feedback as programs are being shaped and controls are being established,” she said. “Simply put, we hoped our review would help (the early learning department) get off to a good start as a new state agency.”

“We also decided to send a letter instead of doing a full audit because we found DELC was generally on the right track,” Kerns said. Valeria Atanacio was promoted to tribal affairs director of Oregon’s early learning department in 2022. A year later, she was demoted, with little warning, she said. (Amanda Loman/InvestigateWest)

The letter noted the department’s success in taking over management of programs and responsibilities previously handled by other departments, including the Employment Related Day Care subsidy that helps families afford child care. It is a more than $400 million program that is in high demand; since  thousands of families have been waitlisted. Reducing that waitlist is a high priority for staff.

However, the audit said the agency’s recordkeeping and budgeting practices could be improved: One example auditors pointed out was the decision to pay providers of Preschool Promise, the state’s free preschool program, during the pandemic without any enrollment requirement, in order to prevent closures. Preschool Promise is one of the early learning department’s marquee programs, but has come under fire from legislators and the public for under-enrollment, which some employees told InvestigateWest was partly due to mismanagement.

“When auditors asked for documentation to show when and why the initial decision was made and how it was communicated to providers and the public, DELC staff were unable to provide that information,” the letter states. “The pandemic was a chaotic time; it is in these crucial times agencies should provide assurance and accountability for their decisions.”

In a letter responding to the audit, Chatterjee said the programs division will improve such documentation. The agency also launched  to track Preschool Promise enrollment throughout the year and assist in reallocating spots where they’re most needed, and it reinstated enrollment minimums for providers to receive state money.

The agency also implemented a new equity training program for managers in February, and is considering making the training mandatory for all staff, Chatterjee said. Training is one of several strategies mentioned in the agency’s  that was announced in early July.

The department also is completing a “culture assessment” initiated in the spring shortly after InvestigateWest’s reporting was published “to gain a deeper understanding of our workplace dynamics,” Chatterjee said. Leaders expect to review the results of that assessment in the fall, she said.

This story was originally published by , an independent news nonprofit dedicated to investigative journalism in the Northwest. Reporter Kaylee Tornay covers labor, youth and health care issues. Reach her at 503-877-4108 or kaylee@invw.org. On Twitter .

Stockton Unified school officials could face criminal charges and be forced to repay millions of dollars in relief funds to the federal government after released Tuesday found “sufficient evidence” of fraud.

The audit by an independent California agency largely focused on a questionable $7.3 million contract paid for with pandemic relief funds. In 2021, former officials appeared to ram through the purchase of 2,200 ultraviolet air filters designed to kill COVID despite multiple warnings that they weren’t following laws and procedures, the report said.

In new details described by the auditors, two district employees — a purchasing manager and Stockton’s chief business officer — eventually quit rather than help the board approve a proposal from a company that seemed to be trying to “manipulate” the bidding process. 

Auditors who conducted the review on behalf of the San Joaquin County Office of Education said the school board, former Interim Superintendent John Ramirez Jr. and former Chief Business Official Marcus Battle “failed to perform their fiduciary duty.”

Reached Wednesday afternoon, Battle strongly denied that he was at fault and said Ramirez faced “extreme pressure” from the board to move the contract forward. 

“This district was a disaster before I walked through the door,” Battle said. “We wanted to right a ship that had been going in the wrong direction for a long time.” 

The next step could be criminal charges.

“I look forward to thoroughly reviewing the independent auditor’s report,” San Joaquin County District Attorney Ron Freitas said in a statement. “Make no mistake, any attempt to commit fraud on the backs of our children will be prosecuted to the fullest extent of the law.”

The release of the long-awaited report — presented to the board Tuesday night — was the latest rebuke of a Central Valley district that has been mired in controversy throughout the pandemic and faces a next year. A civil released last summer and reporting this week by The 74 point to sloppy business practices, petty board disputes and expenditures that gave the appearance of a conflict of interest. Now, a new board majority is promising to root out corruption and offer transparency on how the district is spending $241 million in pandemic aid.

“We could not in good conscience sit by and do nothing,” Troy Brown, county superintendent of schools, told the board, as members of the audience gasped and applauded. The county office has oversight of districts’ finances. 

Some attendees directed shouts of “Resign” at the three members still on the board who voted for the contract — Alicia Rico, Ray Zulueta Jr. and Cecilia Mendez. The county gave leaders of the 36,000-student district until March 1 to respond to a list of recommendations, including revising purchase policies, completing required paperwork and ensuring ethics training for board members.

Board President AngelAnn Flores told attendees that the findings didn’t surprise her. 

“I promise you that everybody involved in this will be held accountable,” she said. “I am just really upset [and] disappointed that we got here.” 

The 74 previously reported that a former board trustee, Scot McBrian, initially recommended that the company, Alliance Building Solutions, make a presentation on the filters to the board, which the grand jury said was “unusual” and could be “perceived as a conflict of interest.” McBrian said he heard about the filters from former Stockton mayor Anthony Silva, who has had a since 2012. 

The audit added further details. Silva hosted a holiday party where Alliance representatives initially briefed McBrian and others about the filters. Zachary Avelar, a colleague of Silva’s who was later appointed to the school board in July 2021, was also at the gathering. At the time, Avelar was also on the board of the Stockton Kids Club, where Silva was CEO.

Avelar and Silva did not respond to requests for comment. In a previous interview, Avelar said, “I’m nobody’s puppet,” and that it’s “BS” to say he was “voting a certain way for someone else.”

Avelar joined the board 7 months after Silva’s party. Less than two weeks after he took office, the board voted 6-1 to approve the contract with IAQ Distribution, a subsidiary of Alliance, even though district staff rated the company’s proposal the lowest in quality out of five. Flores was the lone dissenter. 

The board chose IAQ despite the fact that it was not a licensed contractor in California and had been the subject of complaints the district received about labor violations.

In January 2021, a representative from Alliance wrote interim Superintendent Brian Biedermann and referenced “working with your team” to develop the proposal. The wording, the auditors said, suggested the company was trying to evade the normal bidding process.

Susanne Montoya, then-chief business officer, expressed concerns about the bid to Ramirez. But in an email included in the report, which the auditors described as “intimidating,” Ramirez insisted there was no conflict of interest with the bid and suggested the only problem was that staff had “defied a directive” to include Alliance in the pool of potential vendors. 

Montoya later resigned, as did Nick LaMattina, a purchasing manager who wrote a memo to Montoya and Ramirez about the “appearance of impropriety.” That’s when Battle became chief business officer.

Battle said he was only in the district for a month when the proposal first went before the board in July 2021 and that he opposed it. 

Department directors, he said, reported receiving visits from Mendez and other board members “who often utilized threats, intimidation and their board power to get what they wanted.”

Mendez declined to comment and referred The 74 to a district spokesperson. During the Tuesday meeting she pledged to “move forward and get the training that we need.”

Battle added that the county also bears some responsibility for allowing the district to reach this point.

Ultimately, only 800 of the filters were installed in classrooms. The remainder sit unused in a district warehouse.

According to the audit, “The district and board ignored their own policies, procedures and past practice in order to award the contract to their preferred vendor.” 

Legal services 

At Tuesday’s meeting, Zulueta turned criticism back on the county and argued that it had approved previous budgets, regardless of a deficit. He blamed the decline in revenue on the district’s past approval of charter schools.

He previously told The 74 in an email that he believes the board “took every measure to ensure that all decisions were vetted through appropriate legal counsel when recommendations were made by staff.” 

But the audit team also found fault with the district’s hiring of the attorney who provided that advice. The board didn’t follow its proposal process when it hired attorney Jack Lipton in February 2020, the audit said. The report includes notes from Flores and a former board member, who said they didn’t get a chance to weigh in on the decision to hire him.

And Mendez, board president at the time, drove Lipton to the meeting, raising questions about the attorney advising board members even before he was hired, investigators found. The contract to hire him, they said, was also written by his law firm, not the district.

“It is of concern that the board set a policy and then ignored it,” the auditors said. “Even more irregular and of equal concern is that the board would contract for services from a legal firm that would not advise their prospective client to follow their own policies.”

In January, at the first board meeting to feature the new majority, members . 

In an interview, Ramirez said he was alarmed by the district’s fiscal condition when he became interim superintendent in early 2021. That’s why he called in the auditing team to look at the district’s finances. An initial in 2022 warned that the district was paying for “essential” positions with COVID relief funds and failing to plan for the future when that money dries up. 

The district provided The 74 with records showing that relief funds have paid the salaries of 21 current and former central office employees, including 14 making over $100,000. That includes Motecúzoma Sanchez, the district’s family resource center director, who also runs a tabloid-style website that targets political opponents in the district.

Ramirez, who signed a non-disparagement agreement when he resigned last June, said he couldn’t comment on the findings of the new audit, but added, “I have no concerns about what I’ve been involved in.”

He said he hoped the county superintendent would move quickly to bring closure to the community.

“I don’t feel that the challenges [in Stockton] are unique,” he said. “I think they’re a lot more extreme maybe, but I don’t think they’re unique.”

Nearly 80% of students in the Central Valley district live in poverty. High COVID infection rates were packing plants where many of their parents work, and when schools reopened, more than a third of students were chronically absent. 

But almost three years after began flowing to school districts, Stockton has spent only a fourth of the $241 million it received, overcome by and deep mistrust among board members. The money it did spend has come under fire from two civil grand juries, who criticized the school board for approving at least two projects it later abandoned. And Tuesday, an independent auditor hired by the San Joaquin County Office of Education is expected to release the results of a long-awaited into the district’s finances.

Based on the grand jury reports — as well as documents The 74 obtained from public records requests and numerous interviews — several questionable expenditures have emerged, including: 

• $7.3 million in air filters designed to kill COVID from a firm that was not licensed at the time to do business in California — the bulk of which remain unused in a district warehouse.
• Over $2 million to cover the six-figure salaries of 14 district executives. One of them also runs a popular that regularly targets political enemies, including student activists and teachers. 
• $150,000 in startup costs to a program designed to help students make up for months of instruction lost during the pandemic. After five months of planning, the district pulled the plug after deciding it would cost too much. 

“Stockton is a worst-case scenario,” said Jeffrey Henig, a political science and education professor at Teachers College, Columbia University, who studies school boards. The Biden administration, he said, distributed the relief funds as quickly as possible with “an expectation that districts would understand their needs and be able to use it intelligently.”

Instead, with seven superintendents in as many years — and the board of trustees now — the district’s recovery has stalled. It faces a $30 million deficit and risks losing control of its affairs to the county education office.

Losing patience, the community is demanding that leaders address how they plan to use the funds to benefit students.

“I hoped that class sizes would be smaller, that teachers would have some extra time to step back and help their students that are struggling,” said Michelle Munoz, who left her job in Stockton as an instructional coach last fall. She wanted the district to hire staff to find students who didn’t show up for online learning, but that didn’t happen.

Despite the relief funds, she said one school she worked at couldn’t get a carpet and other furnishings to open a “calming room” for students with behavior and trauma issues. At her most recent school, Wilson Elementary, she heard a secretary on the phone asking to buy rolls of laminate for classroom posters on credit because the board had yet to approve the district budget.

“I know it’s always been a problem, teachers having to buy their own supplies,” she said. “But now you have millions of dollars.”

A ‘crisis of self-image’

The district’s financial turmoil didn’t occur in isolation.

In 2012, Stockton became the largest city in the nation at the time to . During the housing boom, the city increased retirement benefits for its employees and financed new sports venues downtown along the San Joaquin River. But when the bubble burst, it was unable to pay its bills.

“Stockton has had — and this is reflected in the schools — really dicey economic times,” said Robert Benedetti, a professor emeritus of political science at the University of the Pacific, which has a campus in Stockton.

On top of that, he said, the city suffers from a “crisis of self-image” — labeled more than once by as America’s worst and “most miserable” city because of high unemployment and violent crime. 

And it’s not just the city that has been singled out for such harsh critiques. “I think Stockton Unified might be the worst system in the country,” was the recent assessment of a prominent California school reformer, whose nonprofit issued decrying the district’s “inept governance.”

Even strong districts with stable leaders have struggled to spend their relief funds in the face of staff shortages and supply chain delays. By the time the money came Stockton’s way, however, the district had been beset by years of interpersonal feuding and economic malaise. Since 2017, enrollment has declined from about 44,000 to 36,000 students, contributing to anxiety in a community where over 3,000 people work for the district.

“People’s livelihoods are affected when programs shrink,” said John Ramirez Jr., who resigned as superintendent last June after just 13 months. “Of course there is going to be concern.”

‘What’s he trying to sell?’ 

The pandemic was to the region’s economy. Then, just as schools were trying to recover, separate grand juries in and issued scathing reports that didn’t inspire confidence in the district’s ability to manage a huge federal windfall. 

California impanels civil grand juries to serve as government watchdogs. In Stockton, the panels pointed to a district in disorder and a “vicious cycle” of superintendent turnover: Promising projects started under one leader would be abandoned when the next one took over.

Frequently, students paid the price.

The district contracted with Educational Consulting Services Inc. of Huntington Beach to provide a Saturday program for students to make up for missed instruction — a sorely needed service in a district where are chronically absent, 79% are not proficient in grade-level math and 73% are not proficient in grade-level reading.

But after paying $150,000 in federal relief funds for start-up costs and signing in January 2022 with the teachers union to provide instruction, efforts to launch the program ceased, according to the grand jury. 

Marcus Battle, then the district’s chief business official, called the program “a noble idea” that fell victim to poor planning. The district, he said, initially sought to roll out the program to less than 20 schools. But when leaders decided to expand it to serve thousands of students at a potential cost of “tens of millions” of dollars, he worried it would “spiral out of control” and withdrew his support.

A district spokesperson declined to discuss the episode.

Another relief-fund project that started only to be quickly abandoned was a $7.3 million investment in ultraviolet air filters designed to kill COVID. The firm hired to provide and install the filters, IAQ Distribution of San Diego, was not licensed at the time to do business in California, the grand jury found.

In part of a pattern the panel identified, the board approved the contract even though district staff rated IAQ’s proposal the lowest-quality bid out of five submitted. 

The district would not elaborate on why the work was left unfinished. Newly installed board President AngelAnn Flores, the lone member to vote against the contract in August of 2021, is pushing for an investigation into what she deems “misspent money.” She called the deal “bogus” and said the district is planning to sue IAQ to recoup $6.6 million.

Neither IAQ nor its parent company, Alliance Building Solutions Inc., responded to calls or emails seeking comment.

Ultimately, only the district paid for were installed. The rest are sitting in a district warehouse.

The example is one of several cited by the grand jury in which the board of trustees that oversees the school system made “crucial decisions with minimal data, knowledge and consideration.”

In the case of IAQ, lifelong connection between a former board member and Anthony Silva, a former Stockton mayor with a long list of legal troubles.

“I heard about it through Anthony Silva,” Scot McBrian, a trustee at the time, told The 74. “My first thought was, ‘What’s he trying to sell?’ I asked him if he had any financial interest in it and he said no.”

McBrian said he’s known the former mayor since they played chess when Silva was a teenager. Aside from the tip from an old friend, the filters reminded him of an air purifier he used to sell in Texas and later installed in his home. After recommending give a presentation on the devices, McBrian told the board that IAQ should be considered a potential vendor.

Without elaborating, the grand jury said, “The practice of a trustee recommending a vendor is unusual and may be considered or perceived as a conflict of interest.”

Oprah’s candidate vs. the ‘underdog’

Silva — and his successor as mayor, Michael Tubbs — play an outsize role in the psychic landscape of the city. Once a school board member who called himself the “people’s mayor,” Silva, a Republican, is a Stockton native who worked to rebuild the city’s police force and provide as it emerged from bankruptcy. He frequently warned of “outside forces” he said were trying to influence the city’s agenda. 

“People see him as an underdog and he always seems to be advocating for the underdog. I think that sometimes resonates with this town,” said Jose Rodriguez, executive director of El Concilio, a nonprofit that runs preschool programs in district schools and opened a charter this school year. 

A Stanford graduate, Tubbs leapt to national prominence when Oprah Winfrey to boost his early political career. He sought support from outside donors, including those that embraced charter schools, and backed reformer John Deasy, who served as superintendent of the before running Stockton Unified from 2018 to 2020. Tubbs is best known for launching a to help the city’s poorest residents and Democratic California Gov. Gavin Newsom.

“He was talking about programs that were of national interest,” said Benedetti, the University of the Pacific professor. “He was not seen as a local in any way, and there was nobody to tout him as one.”

Silva’s star dimmed following a series of arrests. In 2016, he pled guilty to a of providing alcohol to a minor in connection to a strip poker game at a camp he ran for low-income youth. The following year, he to felony conflict of interest. Prosecutors said he transferred $5,000 from a mayor’s fund to the Stockton Kids Club, where he served as CEO, and used club donations for personal expenses, including trips and online dating.

In 2022, Silva, who now runs a family entertainment business called Indoor Adventures, to have the conflict of interest charge reduced to a misdemeanor and got the conviction expunged from his record. Multiple attempts to reach him by phone and Facebook, and through two attorneys, were unsuccessful.

Though 2020 was the last time either man occupied City Hall, support for them remains a kind of district shorthand: Silva’s backers see themselves as defending the traditional school system from privatization, while Tubbs’s supporters say they want alternatives to a punishing status quo. 

But if Silva disappeared from public life, it’s often hard to notice.

In 2021, three members of the board of trustees , the current board president, in part because she accused them of being Silva’s associates. She countersued on First Amendment grounds, and even though the trio later dropped the case, a county that they need to pay Flores over $19,000 in attorneys fees. Silva also sued her for defamation over comments she made at a March 2021 meeting regarding his conviction for serving alcohol to a minor. A hearing on that case is scheduled for March 21.

“I’m seen as controversial and uncontrollable,” Flores said.

In recent years, shouts of “Out of order!” have dominated board meetings. The the board for its frequent use of complaints and censures against trustees in its voting minority, which at the time included Flores.

‘Reform politics’ 

The tensions in Stockton often arise from a sense of hopelessness in a city where achievement was stagnant even before the pandemic.

“Folks have not had results for a long time. If I’m a parent, I’m going to be concerned about that,” said Ramirez, the former superintendent. With “second-, third- and fourth-generation students in poverty, we’re not going to make a change in our community until they have an opportunity to succeed.”

Ramirez sidestepped questions about district controversies during his tenure, citing the terms of his , which continued his $285,000 salary for an additional year. But he did note that the persistent toxicity tends to overshadow even legitimate accomplishments.

A successful online — now in more than 40 districts nationally — got its start in Stockton, and the graduation rate, he said, has increased from 79% to 83% since 2018. The district also at least $9 million in relief funds to upgrade science labs and career education programs.

But many families aren’t waiting for the district to improve. More affluent parents among Stockton’s 320,000 residents tend to put their children in private schools or move to the neighboring Lincoln Unified district, which has a lower poverty rate and higher-performing schools. Roughly 6,000 Stockton students attend .

Trustee Ray Zulueta Jr. sees the grand jury and fraud investigations as proxy attacks by community members affiliated with “multiple groups donating millions of dollars to education reform politics in Stockton.”

The Bill and Melinda Gates Foundation, for example, awarded in 2020 to the Community Foundation of San Joaquin to expand an “early college” model that allows students to earn college credit in high school. And the City Fund, which supports nonprofit organizations opening charters, donated $1.2 million last year to San Joaquin A+, led by Don Shalvey, the California charter school pioneer who released the damning report on Stockton schools and founded Aspire Public Schools. Shalvey spent 11 years at the Gates Foundation, and the Aspire network now has 10 sites in Stockton. (Both the Gates Foundation and City Fund provide financial support to The 74; donors play no role in newsroom editorial decisions.)

To Zulueta, these are “liberal institutions … working hand in hand with big business entrepreneurs to control localities through takeovers of public education systems.” Campaign donations from local reformers, he said, have favored Democrats on the board who support “political movements like [Black Lives Matter] and defund [the] police.”

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In most districts riven by reform fights, the most formidable enemies of school choice are typically teachers unions.

But in Stockton, the two groups have found common cause. They mutually endorsed four members for school board, all of whom won in November. Along with Flores, who took over as president, they now hold the majority on the seven-member board.

Silvia Cantu, a sixth-grade teacher at Washington Elementary and a member of the Stockton Teachers Association, said she supported the candidates because she didn’t like the direction the district was going under the previous board. 

“I did not want [Stockton Unified] taken over” by the county, she said. The former trustees, she added, “mostly spent millions of dollars on administration. [The money] won’t trickle down to the classroom.”

The success of these strange bedfellows put both groups in the crosshairs of Motecúzoma Sanchez. In a city full of brash personalities, there is perhaps none so aggressive as Sanchez, founder of the named for the region’s area code. 

The characterizes the candidates who now lead the board as pawns controlled by and “” set on luring Black and Hispanic families into charter schools. The site posts unflattering-as-possible photos of board members, teachers and even students who raise concerns about the district’s finances and portrays them as part of a larger plot to expand charters.

The seven-year-old site has grown as the lost readers, from 20 years ago to about 33,000 today.

“I destroyed them and took over as the dominant media source for the region,” Sanchez boasted in an email to The 74. 

During the 2022 election, the 209 Times accused teachers in the union, by name, of trying to “fool unsuspecting parents” into voting for the four candidates. In a typical example, it mocked a former Stockton Unified student — now 26 and a member of the advocacy group FixSUSD — by posting her photo next to Fiona’s, the ogre princess from the movie Shrek, with the caption, “Who wore it better?”

Out of fear of being shamed by the site, several district employees contacted by The 74 asked to remain anonymous. The irony is not lost on them that the source of their fears is a colleague — one who serves as the face of the district’s efforts to welcome families and help those in crisis.

Since 2021, Sanchez has been director of the district’s . During his tenure at Stockton Unified, federal relief funds have been paying his yearly salary, now at $141,000. 

Sanchez didn’t respond to questions about his salary or his treatment of political opponents. But in another email, he accused a 74 reporter of being “a paid shill” for charter developer Shalvey and “the national charter school movement.”

“Nothing you can do will save these devils,” he wrote. “I have big plans for all of you.”

According to the district, Sanchez is just one of 21 current and former high-ranking central office employees who have been paid with relief funds.

Another is Armando Orozco, who earns $150,000 a year as director of facilities. In September, the district placed him on paid leave after he sent an email to current Interim Superintendent Traci Miller demanding $800,000 to stay silent about “corrupt and erroneous actions” in the .

Orozco could not be reached for comment, and the district declined to make Miller available for an interview. 

The head of the agency conducting the fraud investigation has already indicated that paying department directors out of relief funds is a sign of financial distress.

“If you’re going to have them in the central office, the implication is that they are there to stay,” said Michael Fine, CEO of the Fiscal Crisis and Management Assistance Team, “Why would you be using one-time funds?”

‘Personalities and vision’ 

After running on promises of greater transparency, the new board is under pressure to produce results.

On top of the projected budget shortfall, a fraud investigation and a long list of grand jury recommendations it has yet to implement, the district has just a year and a half to show it can responsibly spend its remaining $180 million before hitting a congressional deadline to obligate the funds.

“We didn’t get here overnight,” explained board president Flores, a 45-year-old substitute teacher and former afterschool program leader.

In one of its first official acts, the board in January devoted an entire meeting to informing the public on how relief funds have been spent. Staff, teachers and community members packed the board room of the district’s modern administration building, about a block from the waterfront. 

Flores, who asked many of the questions, seemed underwhelmed by a series of PowerPoint slides the district provided displaying lump sums for items like transportation, instruction and maintenance. 

“I was expecting a little more detail,” she said, drawing applause from several observers. She later referenced “illegal” facility contracts, but offered no specifics.

Cecilia Mendez, the former board president — and among those who sued Flores — waved off any suggestions of financial mismanagement.

“This board has done nothing wrong,” she said.

Before the trustees took their seats, a district employee placed a small bamboo plant and a copy of The Giving Tree next to each name plate. She reminded them of the adage about money not growing on trees, stressing that the relief funds require “monitoring and care.” In the book, the tree gives everything to its ungrateful owner until there is nothing left but its stump.

For about a year and a half, Zachary Avelar sat in one of those seats. Despite losing in November, he does not seem sad to have left it all behind.

 “I did not enjoy local politics,” said Avelar, who was just 22 when he joined the board. “Everyone says they’re about helping children, but we both know that’s not true. People here fight over personalities and vision.” 

They’ve been busy.

“Business is booming,” Kori Smith, an assistant special agent in charge, told district officials at a conference earlier this year on oversight of federal programs. 

He offered hypothetical examples of fraud and abuse of relief funds meant for pandemic recovery — for example, the purchase of 700 Chromebooks when a district only needed 500, or stockpiling masks and other protective gear at staff members’ homes. 

One actual investigation, turned over to the Department of Justice, led to of two Louisiana Christian University students who stole the identities of nine students and used their names to obtain in emergency aid intended for housing, tuition and food. In a more outlandish example unconnected to education, a Texas man is serving prison time for bilking that helped businesses pay their employees during lockdown out of almost $25 million and using some of it to buy a Bentley convertible.  

“We think it’s going to get worse,” Smith said. “It’s a lot of money that was unexpected.” 

Indictments for defrauding the government make headlines. But they’re also just one lever in the complicated machinery of oversight districts face as they spend an unprecedented $122 billion from the American Rescue Plan. Districts face increased scrutiny from federal and state officials as they move from planning how to use the relief funds to signing contracts. But fear of audits has had an unintended consequence, some experts say: Districts are proceeding cautiously to spend funds meant to fix urgent problems.

“As compelling as it is to ask ‘Will this help our kids?’ the next question is ‘What will the auditors say about it?’” said Sheara Krvaric, co-founder of the Federal Education Group, a law firm specializing in federal K-12 programs.

That means Education Secretary Miguel Cardona’s frequent calls for districts to use the funds as soon as possible to address student learning loss and other needs sometimes fall on deaf ears.

For example, some districts have been reluctant to spend relief funds on non-academic programs, like sports and physical education “even though there is pretty convincing evidence it helps with learning loss,” Krvaric said.

And despite severe staff shortages and turnover, some districts have opted not to use relief funds on retention bonuses or other incentives to keep teachers “because their states have signaled that would be unallowable,” she said. “This is despite clear guidance from [the Education Department] that it is allowable.”

Those contradictions give district and state officials extra reason to be on their guard. “There’s a ton of confusion still about what you can spend the money on,” she said.

Meanwhile, auditors with the independent Office of Inspector General aren’t necessarily digging for subtlety. Just , they cited Oklahoma Gov. Kevin Stitt’s office for failing to keep more than $650,000 in relief funds from being spent on arcade games, Christmas trees and 131 sets of cookware. The state set up an $8 million program to offer $1,500 grants to low-income families and contracted with ClassWallet, an online payment platform for educators, to run the program. 

Auditors said the purchases didn’t meet the standard for “emergency educational services” and called on the state to return the funds spent on the “unallowable” items. In a response, the state blamed ClassWallet for the “deficiencies” and said it has improved oversight. 

‘A moving target’

A year ago, parents, teachers and community members were invited to advise districts on how they should spend the considerable federal windfall. But as auditors dig into the details, many parents accuse districts of stashing the money away and continue to clamor for increased and other opportunities for their children to catch up. 

Keri Rodrigues, president of the National Parents Union, argues that many parents haven’t seen these funds benefit their children. She meets every two weeks with Cardona or his staff, where the use of relief funds comes up frequently.

“He wants districts to be acting with urgency,” she said, ‘“but they are saying, ‘We don’t know what to do.’ ”

By law, districts can’t just hold onto the money. They have to obligate it by the end of September, 2024. While the department has said it will consider some extensions, their approval is not guaranteed.

At the same time, the rules, which require districts receiving at least $750,000 in federal funds to undergo an audit, are shifting rapidly. 

“I’m talking total reversal. It literally is a moving target,” said Bonnie Graham, a partner with Brustein & Manasevit, a law firm specializing in federal education policy. “School districts are in a tough spot. You can’t afford to make a mistake.”

In 2020, the Biden administration’s Office of Management and Budget districts were not required to track employees’ hours charged to Elementary and Secondary School Emergency Relief — known as ESSER. The 2021 and 2022 versions of the document said the . 

Districts are also allowed to use relief funds to pay themselves back for money they spent at the start of the pandemic, but their documentation often doesn’t go back that far, said Cathy Harlow, manager of an accounting firm in Pennsylvania that conducts district audits.

A former superintendent for the Tyrone Area School District — situated midway between Pittsburgh and Philadelphia — she sympathizes with districts.

“Our firm leans on the side of leniency,” she said. “We’re holding districts accountable, but understanding that the landscape has been changing rapidly as they’re going through it.”

‘New territory’ 

Sometimes audits don’t tell the whole story.

The inspector general’s office also reviewed how the Missouri Department of Elementary and Secondary Education used to connect more students to the internet. 

Due to a clerical error, the state didn’t reach all eligible districts, showed. What it didn’t show was that officials used ESSER funds to cover the rest. 

“We just had to make peace with it,” said Chris Neale, the department’s assistant commissioner. “We know there will be a ton of auditing that has never gone on before. It’s new territory for everyone.”

That’s particularly true for smaller districts and charter networks, which normally don’t spend enough federal funds to trigger an audit. The Colorado Charter School Institute has some charter management organizations facing the process for the first time.

“The question that I get from CMOs is, ‘Do we really have to do this?’” said Andi Denton, director of finance and operations. Most, she added, just don’t want to spend the $10,000 or so to pay an accounting firm to complete it. She reminds them they’ve gotten “a lot of money.”

As districts and charters apply for relief funds, some state officials are kicking those requests back for more information before approving them. 

In Georgia, for example, the state audit department initially rejected districts’ requests to use relief funds to cover salaries. They interpreted the law to mean those funds could only be used to make up for a drop in state revenue, said Matt Cardoza, a spokesman at the Georgia Department of Education.

To clear up the confusion, federal officials sent a letter explaining that using relief funds to pay staff is “not dependent on a shortfall in state and local funding.”

Marguerite Roza, director of the Edunomics Lab at Georgetown University, said some officials might not have kept up with the “twists and turns” in messages from the education department about “allowable” expenses. 

Relief funds for education, the law says, are meant to “prevent, prepare for and respond to” COVID. The most recent from the department says districts should use the funds to “emerge stronger post-pandemic” and address needs exacerbated by COVID. 

Districts are now submitting reimbursement requests to their state education departments, which typically turn around approvals quickly — except for a few questionable items.

“A couple districts asked for pressure washers to clean sidewalks. It’s very hard to connect that to COVID,” Cardoza said. “We don’t try to be so over the top [that] they can’t spend their money, but we’re trying to keep them from being audited.”