Internal TUSD documents question Sanchez's financial moves

TUSD emails describe several examples in which jobs were modified or added, or promises of raises were made without consulting current Chief Financial Officer Karla Soto or her predecessor, Yousef Awwad, on possible funding sources.

TUSD Superintendent H.T. Sanchez says he did not make unilateral decisions.

Rather, he said that on different occasions, he worked separately with Soto, Awwad, a budget analyst and staffing experts to make decisions, some of which he said saved TUSD money.

As a result, Sanchez said the district is planning to carry forward $9 million in maintenance and operations funds and $4.3 million in capital funds, which is higher than in years past. He said that money will be reallocated to support sites and staffing.

Still, Ricky Hernandez, deputy superintendent and chief financial officer for the Pima County School Superintendent’s Office, said Awwad’s and Soto’s concerns highlight the danger of unilateral decision-making, which is not considered to be best practice in any organization.

“As the superintendent of a school district, when you have a leadership team, collaboration is only going to allow decisions to be more supported simply because you’ll have the facts from the people who have expertise in your organization,” Hernandez said. “Unilateral decisions in any organization, from a management perspective, are not necessarily wise.”

Hernandez said unilateral decisions tend to have a ripple effect, positive or negative, on other areas.

News broke in email

The budget concerns came to light last month after TUSD Governing Board member Michael Hicks asked Awwad, who is resigning to take another job, to provide a picture of the district’s financial outlook for the upcoming school year compared with the current and past school years.

The following morning, Awwad’s response broke the news of the estimated $15 million deficit, copying Sanchez and Soto, a series of emails obtained by the Star shows.

Six minutes later, Sanchez tersely responded by email: “This is the first I have heard of this.”

Awwad wasted no time telling Sanchez, again by email, that he had been cautioning the superintendent against making decisions without involving himself or Soto.

“Many of the reasons that this happened is that we did not stick to our plans, which I cautioned against,” Awwad wrote. “Many decisions were made and reversed that caused more expenses (than) it was planned for.”

Hours later, TUSD Governing Board President Adelita Grijalva called a press conference where the possible deficit was shared publicly as a worst-case scenario, with Sanchez highlighting all of the state and federal cuts TUSD has endured over the years.

Sanchez denied that any of his multimillion-dollar initiatives, many of which he said were paid for by shifting funds around, had anything to do with the possible shortfall. Those initiatives included opening two early-learning centers, addressing salary inequity issues, lowering class sizes and moving away from the practice of annual layoffs.

An hour after the press conference began, Sanchez responded to Awwad’s email, which asserted that Sanchez had been warned: “That’s right. Thanks for the review. … I appreciate you doing this before leaving.”

Sanchez went on to ask Awwad for recommendations on an external auditing firm that could review his work. He also said that because Awwad had been busy, Sanchez involved either Soto or another finance employee in decision-making.

“You are always proactive, and I will miss your help, amigo. Stop by tomorrow before you head out,” Sanchez told Awwad. Awwad’s only response was to clarify that he had cautioned against Sanchez’s decisions because they were made without his or Soto’s knowledge.

Caught off-guard

Emails over the last seven months identify incidents in which Awwad and Soto are caught off-guard by financial decisions or promises.

In one instance in June, there was discussion about adding director and coordinator positions in a department — decisions that were made in a meeting with Sanchez and the chief human resources officer, Anna Maiden, but not Soto or Awwad.

In an email, Awwad told Sanchez he was concerned about the administrative costs that were added but not budgeted for.

“Was this discussed with finance? I was not aware of this plan, and I was not prepared for it, either,” Awwad said.

Sanchez responded, “I understand we have 20 mil in (desegregation funds) that wasn’t spent. Relative to this item, everything was contingent on deseg funding being available. Can we ascertain if such exists?”

Awwad told Sanchez he was not aware of those funds. Soto confirmed that $20 million was not accurate.

Awwad asked Soto whether other new positions Sanchez worked on with Maiden had been addressed, saying they were reportedly budget-neutral due to consolidating other positions, but he had yet to see any details. Sanchez urged Awwad to stop by his office to talk if he needed more details, saying, “I worked on this while you were out.”

It was only incidental to meeting with employee group representatives in June that Awwad learned Sanchez promised to give raises in December.

“We have no recollection of this promise,” Awwad told Sanchez. “Is this true?”

Sanchez told Awwad the raises were contingent on increased funding from the state due to a lawsuit or an override.

Awwad told him any new funding was not possible until the 2015-16 school year.

As recently as July, after receiving a request for tentative department and school budgets, Soto expressed frustration about the budgeting process, saying, “I have found this budget process very difficult to work with since deadlines were not adhered to and requests keep trickling in.

“I am now being held accountable for not providing information. I want to be supportive but feel that I am now in a very difficult position.”

What Soto was referring to was the fact that departmental budgets were not ready due to organizational changes made at a superintendent’s leadership team meeting.

Prior to that meeting, Soto said she had not been included in any discussions on adding or modifying positions, which she said resulted in her not being able to answer board members’ questions on a budget presentation.

Awwad backed Soto, saying he also was not involved in that process.

“I am also frustrated with the process,” he told Sanchez in an email. He went on to question the fact that, in addition to he and Soto being left out of discussions, most instructional departments had no input on their budgets, and some never saw their budgets, as decisions were made independently by Deputy Superintendent Adrian Vega and Assistant Superintendent Steve Holmes.

Earlier financial experience

Since coming to Tucson more than a year ago from Texas, Sanchez has said he has experience with school budgeting, with his résumé showing two years serving as a chief financial manager in a growing district — unlike TUSD, which continues to lose enrollment.

While having a global understanding of school finance would help a new superintendent, the system in Texas is far more independent in school finance structure than Arizona, which is prescriptive, Hernandez said.

Sanchez acknowledged on Monday that there is always room for improvement, and said he and Soto have been able to resolve her concerns about being left out of budgeting decisions, adding that she has been at the table for building next year’s budget.

The practice for creating new positions now requires a signature from both Soto and Sanchez before any action can be taken.

“Things I did this past year worked out well; we made sound decisions,” Sanchez said.

Tonight, Soto is expected to provide a fiscal status update to the Governing Board. Details of the report were not available Monday.

The board will also vote on the call for an outside expert to provide an analysis of Awwad’s projection. According to Sanchez, the analysis will ensure that the projection is accurate so TUSD can plan appropriately.