State audit finds no problems with school district pension reporting

During a recent audit, the California State Teacher’s Retirement System did not find any issues with the way Newport-Mesa Unified School District reported employee salaries, the agency said this week.

The state agency launched an audit into the school district’s reporting of employee pensions in December based in part on an anonymous complaint, according to Michael Sicilia, media relations manager with STRS.

However, the anonymous tip was not substantiated by the investigation, Sicilia said.

During the course of the investigation, which concluded this month, the agency looked at employee contracts, salary schedules, payroll records, time sheets, sick leave reports and post retirement payments made to 25 randomly selected district employees, Sicilia said.

“Based on the documents reviewed, the auditor can only validate that the individuals selected for testing were properly reported to CalSTRS,” Sicilia wrote in an email.

Sicilia declined to name the employees who were selected for the audit. A representative for Newport-Mesa Unified could not be reached for comment.

While it is unknown what specifically launched the agency’s investigation into Newport-Mesa Unified, John Caldecott, the district’s former director of human resources, publicly leveled allegations of pension abuse after he was terminated in January.

Caldecott said that he suspected while he was still employed with Newport-Mesa Unified that salary reports to STRS are incorrect and could inflate pensions.

Caldecott had asked the board to authorize a forensic audit of all STRS records of certificated management employees. He said district officials and the board did not act on his request.

The misreporting, Caldecott alleged, concerned the salaries of principals and administrators whose jobs require an administrative credential — a category known as certificated management. He has said he suspects the district was considering forms of compensation such as merit pay in pension calculations, a move that may ultimately drive up pensions.

When he brought his concerns to other district officials, he said a top administrator responded in writing with this remark: “…unless you’d like to personally collect a set of whistles, the blowing of which will hurt your colleagues, I’d suggest that what we’re [top administrator and superintendent] proposing to do fixes the problem prospectively, and that such a fix is wholly acceptable to STRS.”

Caldecott said he is “not surprised” about the outcome of the audit. He said the district administrator who took over providing documentation for the audit from Caldecott after he was terminated could “have a significant impact on the outcome.”

Caldecott is involved in a legal battle with Newport-Mesa Unified over the district’s refusal to release internal emails and other documents related to his complaint of a hostile and abusive work environment under the state’s public records law.

In April, Orange County Superior Court Judge Geoffrey Glass decided that because Caldecott is already in possession of the documents he requested the California Public Records Actrequest is “moot.”

“Further, the two documents and attachments are directly and inextricably linked to Mr. Caldecott’s claim of a hostile and abusive work environment, which is an internal personnel matter exempt from disclosure under CPRA,” Glass wrote in his decision.

Caldecott is in the process of appealing the ruling.