By Jose Servin
A report published by an independent auditor revealed last month that the Rancho Santiago Community College District committed securities fraud by failing to publicly disclose renovations for a district building prior to receiving bond money.
The Orange Education Center at 1465 North Batavia St. was closed in December 2012 because it did not comply with earthquake-resistant Field Act requirements, according to an institutional report published by Santiago Canyon College in 2014.
Elections to approve Measure Q, which authorized the district to use $198 million for renovations and repairs, took place a month before the center closed.
District officials failed to inform voters, through financial statements, that $16 million were needed to repair the center before Measure Q went to public vote, John P. Johns, the independent auditor who published the critical report, said.
“My assertion as a Certified Public Accountant is that the district has not been truthful in terms of the money it has in the bank,” Johns said.
Johns says in his report that the district also improperly moved the monies used to repair the center. Instead of transferring it from bonds for repairs by a formal resolution, which means that a full report of any actions action taken must be written as required by state law, District Trustee’s voted to transfer the money in minute actions – meaning that only a voice vote took place to transfer money leaving no written report or documentation.
“Very serious legal questions need to be answered regarding the OEC and allocation of funds,” George Wright, criminal justice professor said at a SAC Academic Senate meeting.
The Orange Education Center cost $24.2 million to build in 2005. The estimated cost of renovating the building up to code is $21 million, according Measure E Citizens’ Bond Oversight Committee minutes in January.
Before its closing, the center provided free adult classes and day-care services to about 1,000 students.
These students were relocated to temporary buildings at the main Santiago Canyon Campus and another leased location, leading to a 15 percent decrease in full time students, according to the district’s self-evaluation report.