CalSTRS Fails

Press Release from State Controller John Chiang

SACRAMENTO – State Controller John Chiang today released his review of the California State Teachers' Retirement System's (CalSTRS) ability to detect and prevent pension spiking. The review found CalSTRS does not adequately audit more than 1,900 reporting entities (including school districts), has missed opportunities to reduce instances of suspicious or unjustified salary increases and also failed to adequately use existing electronic systems designed to identify cases of pension spiking. It also includes recommendations to address each of those shortcomings.

"Starting with more rigorous auditing and better use of existing technology, CalSTRS must fortify its ability and resolve to crack down on those seeking unjust enrichment at the expense of their fellow educators and taxpayers," said Chiang. "These recommendations aimed at strengthening CalSTRS' anti-spiking efforts will complement the recently-enacted pension reform package and shut down this form of public theft." 

The review specifically examined the electronic methods that CalSTRS uses to detect and prevent pension payments based on unusually large or excessive final compensation amounts, the auditing processes the system uses to oversee the state's school districts, and the efforts conducted by its newly-formed Comprehensive Review Unit during the review period of July 1, 2009, through June 30, 2011. The scope of the review was expanded to include records from three school districts, one community college district and one county office of education.

The review found that the CalSTRS audit program did not adequately detect or deter pension spiking. Although more than 1,900 agencies are a part of CalSTRS, the pension plan averages only 40 audits a year. During the review, CalSTRS was implementing a new stand-alone Compensation Review Unit charged with specifically detecting pension-spiking activity, which should result in more audits. However, the Controller said more auditors are needed to provide adequate oversight of the reporting by districts to CalSTRS.

The review evaluated pay increases granted prior to retirement to determine whether they were adequately approved, justified and documented. A geographically diverse sample of five local education reporting agencies was chosen: Pajaro Valley Unified School District in Santa Cruz County, the San Francisco and San Diego unified school districts, Foothill-De Anza Community College District in Santa Clara County, and the Los Angeles County Office of Education. Two of the five, or 40 percent, lacked documentation to justify pay increases granted to their employees immediately prior to retirement, such as board or executive approval or written performance evaluations. 

For example, at the San Francisco Unified School District, one executive received a 26% pay increase six months prior to retirement, and another executive received a 20% increase one year prior to retirement. The district was unable to provide any documentation supporting those raises.

After similar and repeated requests were made to the San Diego Unified School District, officials ultimately responded that documentation supporting raises was missing from their files.

CalSTRS uses a system that electronically identifies instances in which an employee's monthly pay increase exceeds a certain percentage, or in which an employee's "special compensation" exceeds a specific dollar amount in one year. However, the review found that during the period evaluated, CalSTRS did not review, verify or follow up on pay increases that were flagged by the system. The Controller urges CalSTRS to review all of the cases that were flagged by the system, require the agencies to provide adequate documentation supporting those increases and better determine if the pay increase thresholds are appropriate to detect pension spiking. 

The findings and recommendations from this review will be presented at the September meeting of the CalSTRS Audit and Risk Management Committee. The Controller also plans to perform a similar review of pension-spiking prevention measures at the state's largest pension system, the California Public Employees' Retirement System (CalPERS).

CTA Attempts to Link MLK with Teachers' Employment

I received an email (see below) from the California Teachers Association (CTA) over the weekend and thought it odd that the teachers' union is trying to bring Dr. Martin King, Jr. into their fight to save teaching jobs.  Haven't we reached the breaking point on taxes AND spending? 

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No matter where you are, there is an April 4th We Are One event near you!

On April 3, 1968, Dr. Martin Luther King Jr. traveled to Memphis to support AFSCME union sanitation workers. The next day, he was assassinated.

Carrying forward in the indomitable spirit demonstrated by Dr. King, working women and men across this nation will rally in their cities and towns to continue that march toward economic fairness, justice and equality.

Please show that spirit this Monday. Join your fellow educators in We Are One mobilizations across California.

19,000 pink slips have already hit teachers, counselors, librarians and school nurses and the budget breakdown in Sacramento means it could get much, much worse.

But it's about more than that. It always is.

It's about the future of public education. It’s about making our colleges and universities affordable. It's about the future Dr. King dreamed of...and that we're still working toward.

Our state's very future is at stake. Our families, our communities and our students can't afford for any of us to sit this day out.

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Teachers Union Asks for Higher Taxes

It's no great surprise that the California Teachers Association is calling for higher taxes.  Here is an email that they sent to CTA members yesterday urging them to contact their legislators. 

In response to the email, I contacted my legislator, Assemblyman Chris Norby, and asked him to NOT vote for any new taxes, fees, or the extensions of any current taxes or fees. 

CTA needs to give up its stranglehold on the classroom and return to the teachers' lounge. 

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Urgent Update: Assembly Speaker John Perez announced on Tuesday that he plans for the Assembly to vote on the budget on Wednesday, March 16, beginning at 1PM. Keep contacting lawmakers at their Capitol offices.Your help is needed now to stave off additional devastating cuts to public education and other public services. Get in touch with your state Senator and state Assembly Member at their district offices and urge them to support Gov. Jerry Brown’s proposed budget that would protect public education from more cuts.

Also urge your lawmakers to extend the temporary taxes or put the issue before the voters during a June special election. Lawmakers have a choice between extending the temporary taxes or authorizing billions of dollars more in devastating cuts to public schools and other public services.
Background:To prevent a potential cut of $2 billion or more to our schools, the Legislature must agree to extend the temporary taxes or to place a measure on the June ballot to allow voters to extend them. Either option takes a 2/3 vote of the Legislature to achieve the goal, and it will require at least three Republicans in the state Senate and two in the state Assembly to join with all Democrats to extend the taxes or put the measure on a June special election ballot.
Your efforts can help convince both Democratic and Republican lawmakers to pass the governor’s proposed budget and extend the temporary taxes. The governor’s proposal will help erase the state’s $25 billion budget deficit while protecting schools and other essential services from further cuts. To unsubscribe or change your email preferences, please follow the link below:
http://metrics.mmailhost.com/?r=MTAwMg0KSjQ5NzI5LUNUQS0xLTQ5LQ0KMjEzNzEzDQoxMTAwMDAwMDA3MDkyY2UNCmh0dHA6Ly9jdGEudGhldmFuLnVzL0VtYWlsU3Vic2NyaXB0aW9uLmFzcHg%2fSUQ9N0NCMEE0MTMzMzYyMzcwMS1HNTIyODQ5NzI5OEItRDIwQTQxOTkxNjM2MTg5RTINCnRydWUNCmdyZWdzZWJvdXJuQHlhaG9vLmNvbQ%3d%3d

Key Points:

·         K-12 schools and colleges have already been cut over $20 billion over the last three years--$1,900 per K-12 student.
·         Class sizes are soaring, programs are disappearing and entire school years are shrinking in many school districts.
 ·         More than 30,000 California educators and 10,000 other public school employees have been laid off over the past three years. Another 19,000 received layoff notices this March 15th.
·         The governor’s plan to extend temporary taxes for five years will help prevent further cuts to schools, public safety, health and other vital state programs.
 ·         Without an extension of current revenues, public schools and colleges will lose more than $2.3 billion.  ·         The governor’s balanced budget approach will help protect students and essential services, create jobs, and stabilize the economy. 
Here’s what you can do to help!
Contact your legislators in their Capitol offices by phone and use our CTA legislative portal to contact them, too. Find it at http://metrics.mmailhost.com/?r=MTAwMg0KSjQ5NzI5LUNUQS0xLTQ5LQ0KMjEzNzEzDQoxMTAwMDAwMDA3MDkyY2UNCmh0dHA6Ly93d3cuY2Fwd2l6LmNvbS9uZWEvY2EvaXNzdWVzL2FsZXJ0DQp0cnVlDQpncmVnc2Vib3VybkB5YWhvby5jb20%3d.
Urge your legislators to support the governor’s budget plan and extend the temporary taxes.

 If they are unwilling to do so, ask them to let the voters decide by putting the issue before the electorate as a June 2011 ballot measure. 
Then close the loop by e-mailing lfeldman@cta.org to let us know: 1) Who did you meet with or reach by phone or e-mail?
2) What was the response?  Will the lawmaker support the governor’s budget?
For more information, contact Legislative Advocate Estelle Lemieux or GR Communications Consultant Len Feldman at 916.325.1500.

One Teacher Can See the Light

The other day I spoke with a person from North Orange County who felt compelled to share some of their personal philosophy with me on public employee unions, fat pensions, and job security. The person, we’ll call them Jo, gave me some information I would like to share with you.

Jo opted out of the California Teachers Association (CTA) when she was hired by the local school district. She decided it was worth the payroll deduction to opt out rather than feed the union beast. You see, Jo isn’t your typical CTA dues-paying teacher; she is that inspirational teacher who lives to stimulate you minds.

Jo said she couldn’t believe just how bad some teachers really were and how the union protects them from being held accountable. When Jo first earned her teaching credential she was a substitute for several districts. One of those had a teacher who would call in sick at least once a month. Jo would regularly show up to sub only to find that there was no lesson plan or activities planned by the teacher. Jo finally refused to take the calls from this flaky teacher. A couple of years later, Jo read that the flaky teacher who was always being reprimanded was elected as the local teacher’s union president. Fitting, isn’t it?

Jo recounted for me several instances of lazy and incompetent teachers being shuffled around to various assignments and protected by the union rather than being fired. She has told district officials that she earns too much money when considering she has, in her opinion, the best job ever. That’s the spirit of a good teacher who isn’t just simply riding the gravy train of public education.

Jo’s story is a matter of supply and demand. Here is a quality teacher inspiring children everyday to learn and grow while her peers are stagnant and hardly effective as educators. Every time there is an opening for a teacher, the district receives hundred of inquiries, resumes, and applications – for a single opening! The supply of teachers exceeds the demands of the school. When this occurs, the parties must reevaluate their respective values. Teachers should have more to offer (not necessarily advanced degrees) and schools should have less to offer (not necessarily lower salaries). This creates an equitable balance between the two parties so that the school gets the absolute best at a reasonable price. These basic principles are applicable to every job field, including providing professional land surveying services.

The economic disaster taxpayers have stepped in will soon force public employee unions to reconsider their position. The employees do not dictate who runs an agency or how it is run, although they certainly would like us to think they do. We, the People, run agencies by electing officials, who will be held accountable this November.

The apparent ineffectual leadership of our public agencies can be corrected November 2, 2010 by choosing candidates who hold the public’s trust paramount to the interests of the employees. But I have my doubts. There were several candidates who should have been tossed out with the primary election but weren’t. It seems common sense has succumbed to name recognition.