A legislative proposal rooted in the payroll fiasco at the Los Angeles Unified School District (LAUSD) was approved by a State Assembly committee January 15th.
Assembly Bill (AB) 730 would prevent vendors that have been found in breach of an information technology contract from bidding or engaging in a new contract with another state or local agency for five years.
AB 730, sponsored by assistant majority leader Kevin de LÈon of Los Angeles, was born out of the payroll controversy that gripped teachers and administrators in the Los Angeles Unified School District throughout last year. Thousands of school district certificated personnel —teachers, counselors, nurses, nutritionists and some members of school administrations — endured nearly a year of underpayment or overpayment in their salary checks due to a software malfunction in the computer system. Some went months without receiving a paycheck.
School district officials are now requiring those who received more money than they should have to reimburse the district. Union officials of United Teachers of Los Angeles (UTLA) counter that the same system that caused the year-long crisis cannot be trusted to accurately determine what is actually owed.
The bill was approved by the Assembly Business and Professions Committee, and will now proceed to the next committee.
The Deloitte & Touche firm was originally hired to implement a new payroll system and then the firm was paid $95 million last year to repair what district officials and union representatives called an ineffective system of accurately paying its certificated employees.
The total cost to install and fix software is estimated at approximately $210 million.
“We simply can’t afford to throw good taxpayer money after bad by rewarding contractors with new public contracts,” said de LeÛn. “We need to hold this contractor and others like them accountable if they choose to walk away from their commitments to taxpayers.”
Representatives of the teachers union were thrilled to hear that the bill had cleared its first hurdle.
“We are very happy that this bill passed its first committee,” said UTLA president A.J. Duffy. “[AB 730] will punish firms that breach their contracts and not allow them to do business with other public entities for a set amount of time.”
The assistant majority leader referenced the massive problems that teachers in the district faced last year in a statement after the bill passed its first committee, and also expressed concern regarding possible unethical behavior on the part of some contractors.
“I’m concerned vendors are increasingly underbidding government contracts with the intention of recouping revenue at the back-end of projects through cost overruns,” de LÈon said. “These scams hurt the taxpayers and in the case of LAUSD’s payroll fiasco, had tragic effects on thousands of teachers.
“Such contractors shouldn’t be able to simply walk away from their obligations to public entities and must be held accountable for their conduct. Assembly Bill 730 will both deter these types of contracting scams and prevent future debacles like the one suffered by LAUSD.”
Duffy and four teachers who say they have been victimized by the payroll debacle traveled to Sacramento to speak before the Assembly committee. Patricia Thomas, a teacher at Flournoy Elementary School in Los Angeles, told the legislators that she lost her husband last year and was forced to take out an emergency loan after going several months being underpaid. In May, Thomas received a check for only $23.
Paul Duke, a Venice resident who teaches at University High School, is not entirely sure if he is receiving the correct amount in his monthly check.
“It’s hard to know, really,” Duke said. “I think that my checks have been accurate for the last few months, as far as I know.”
Thomas, who teaches second grade, was forced to take out a second loan through her credit union due to the fact that she was not paid at all from May until September.
“My daughter and I survived on my husband’s life insurance during the entire summer,” Thomas said.
She began receiving correct paychecks only at the end of last year, and one of the reasons she traveled to Sacramento was to convey to state legislators how teachers lives have been altered by the payroll crisis.
“We wanted them to understand the emotions that are involved in [this crisis],” she said.
“It is simply tragic, the amount of anguish and frustration that this debacle has caused hard-working dedicated teachers,” said Duffy. “We appreciate assistant majority leader de LeÛn’s efforts to ensure that there will be appropriate consequences for contractors who breach their contract and cause so much pain.”
Duke questioned the district’s priorities in not making any visible attempt to recoup any money from Deloitte & Touche, but has demanded that teachers who were overpaid return the funds.
“There seems to be no urgency in getting back the millions of dollars that were spent on fixing this broken system, but they wasted no time in getting the money back that they say they overpaid to teachers,” he lamented. “It makes me really suspicious when lawmakers seem more concerned about preventing this from happening again than LASUD does.”
To date, the district has not taken any action to recover any funds from Deloitte & Touche that it spent on repairing the system, said the teachers union.
Deborah Harrington, a spokeswoman for Deloitte & Touche, said that the company’s contract with the district is over, but the company is still assisting in correcting the glitches in the system.
“We are trying to provide guidance on how they can repair the problems with the software system,” Harrington told The Argonaut.
The company did not send a representative to attend the legislative hearing.
Union officials say there have been fewer complaints of payroll errors in the last few months.
David Holmquist, the district’s interim chief operating officer, also journeyed to the state capital to participate in the committee hearing. Holmquist has stated in prior interviews that he expects the system to be fixed this month.
Calls to the district for comment were not returned as The Argonaut went to press.
AB 730 was scheduled to be heard Wednesday, January 23rd, before the Appropriations Committee.