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A forensic audit has uncovered serious financial irregularities in Rancho Santiago Community College District (RSCCD), including conflicts of interest and violations of state education codes.
The findings have prompted officials to call for higher authorities to intervene. Two individuals linked to the district, including a board trustee, have reported the findings to district attorneys in Orange and Los Angeles counties.
The complaints focus on the Cerritos-based risk pool operator, Alliance of Schools for Cooperative Insurance Programs (ASCIP), which managed the disputed funds.
Audit Findings and Violations
During a March 10 board meeting, Travis Casner, a certified fraud examiner from Weaver, presented the audit results.
The report revealed that both current and former RSCCD administrators withheld financial statements and risk management fund balances from elected officials and external auditors.
This violated sections of California education code and state budget accounting guidelines.
Additionally, the audit exposed conflicts of interest involving former vice chancellors John Didion and Peter Hardash.
Both officials, now retired, failed to disclose their roles on ASCIP’s board while advising the district on policies related to the same organization.
The forensic audit also suggested that ASCIP engaged in misleading financial reporting, as it provided only a single total amount for excess insurance rebates instead of detailing individual district contributions.
Board Members Push for Legal Action
Board President Daisy Tong assured attendees that the board would review the audit’s implications.
However, Trustee Phil Yarbrough took a more direct approach, forwarding the audit to the Orange County District Attorney’s major fraud unit.
He emphasized that as an elected official, he had a duty to ensure that potential legal violations were investigated.
Yarbrough highlighted two major areas of concern for prosecutors:
1. Violations at RSCCD’s administrative level
2. Potential misconduct by ASCIP affecting 140 public school districts statewide
He stressed that the matter pointed to possible financial fraud at the state level, requiring full transparency and accountability.
Broader Investigation in Los Angeles County
Former RSCCD professor and ex-faculty union president Barry Resnick also submitted the audit findings to the Los Angeles County District Attorney’s public integrity division.
Resnick had previously raised concerns about ASCIP’s financial management in 2023, particularly regarding its Hawaii-based subsidiary, Captive Insurance for Public Agencies, Ltd. (CIPA).
Using publicly obtained records, Resnick and his associates discovered that ASCIP held tens of millions in undisclosed insurance rebates belonging to various public school districts.
He reached out to administrators across different districts, many of whom were unaware that ASCIP was holding their funds.
Call for Transparency
Resnick hopes that law enforcement will act on the audit findings.
He argues that the mismanagement of taxpayer funds must be addressed to prevent further financial misconduct in public education.
“This is not how taxpayer money should be handled,” Resnick stated, urging for greater oversight and accountability in how public school funds are managed.
