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Sep 28, 2007 1:17 pm US/Pacific
EXCLUSIVE: LAUSD Money Spent On Shopping Sprees?
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Just think of your one- or two-page credit card statement at home, then multiply that by 1,700!
CBS
LAUSD credit card statements are raising questions about what taxpayers' money is being used for. David Goldstein has the story.
While your children go to school, we got an education in math by going through their administrators' LAUSD credit card statements. We found they were spending money. Lots and lots of money. Sometimes, $5 million a month, raising some serious questions.
''Does that raise a red flag?''
''Well, of course it does.''
Just think of your one- or two-page credit card statement at home, then multiply that by 1,700! That's how many credit cards there are at LAUSD. Administrators spend it on computers, coffee, flowers, just about anything. We went through all these reports and found some interesting items.
$451 at the Sharper Image. $796 in yoga classes. $320 at this day spa in Valley Village. Over $1,600 on a company that sells U.S. Postal Service clothes and accessories. All taxpayers money. All questionable charges, according to the district's inspector general.
''All of those would be violations of the procurement card use, some of them fraudulent.''
Administrators in almost every school have at least one of the procurement cards. They're supposed to be used for low-valued items like office supplies. But the inspector general's conducted an audit earlier this year and estimated $4 to 5 million dollars in fraud of misuse, including charges for electronics and computers that couldn't be justified.
Often we couldn't find the merchandise when we went to look for it.
''It wasn't in the schools?''
''It wasn't in the schools.''
''Which leads you to believe what?''
''That the person bought that for their own use.''
But we found even more!
$500 for a company that sells coffee makers. There were charges to collection agencies. Money transfers to Mexico. Even a cruise to San Francisco. Plus thousands of dollars in movie tickets and sporting events. Even if it was used for students, it's misuse of the card.
''That's the first I've heard about the movie tickets. Even my staff hasn't told me about that. No, that would absolutely raise a red flag.''
And parents we talked to were also upset.
''That's sad. Disgustingly so.''
''I'm shocked and saddened.''
''Isn't it just a blank check for people to charge anything they want?''
But the district's business manager defends the program.
"There is abuse in any system and we take a look at where we can find abuses and we correct policy as it needs to be corrected."
He says they're already had to block hundreds of merchants – like Nordstroms – because charges appeared on the statements. But he admits they can't stop everything.
''We always sample audit. Do we catch everyone? No, I can't say we do.''
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