Bond oversight committee asks board to review $28 million prepayment to contractor and $12 million security spending

The Beverly Hills Unified School District Citizens’ Bond Oversight Committee (CBOC) reported to the school board on June 10 that auditors found past billing and controls problems and urged the board to review several unresolved items, including a $28 million prepayment to contractor Pro West and about $12 million spent on a prior security program.

CBOC member Jasmine Yagari told the board the committee’s financial audit (by Christie & White) and performance audit (by Moss Adams) covered fiscal year 2023–24 and resulted in “clean” opinions overall, but that auditors flagged two findings the district is addressing. “The auditors noted two findings, which is a big improvement from prior years,” Yagari said. The CBOC report summarized corrective steps and credited the district’s new bond manager and construction team with significant changes to controls and billing.

The CBOC asked the board to request and post two earlier mid‑construction audits related to B3/B4/El Rodeo projects; the committee said those reports are not on the district website and were not previously presented to the CBOC. Mark Carrell, also speaking for the CBOC, told the board the committee remains concerned about the $12 million security program and the missing mid‑construction audits and recommended the board examine whether bond funds were properly used for those security purchases.

CBOC members also said auditors found the district had prepaid or overpaid earlier construction payments to Pro West. “We learned that two construction audits revealed the district had prepaid or overpaid $28 million to Pro West in prior years,” Yagari told the board. She said the current bond manager negotiated credits on future invoices to recoup the prepayments and that some historical payments included a 2.5% payment to a former bond manager. Board members asked staff to clarify whether that 2.5% fee was paid on the $28 million in prepayments.

Board members and staff said they welcomed the committee’s work. Board member Russell Stewart thanked the volunteers and asked whether the board should dig further; the CBOC recommended the board weigh a cost/benefit analysis to determine whether a full investigation is warranted. Several board members asked staff and the bond manager to provide the missing mid‑construction audit reports and to brief the board publicly. Interim reports from staff during the meeting indicated the district and its new bond manager have reduced earlier projected shortfalls and negotiated recoveries with contractors.

Why it matters: the CBOC is the voter‑mandated public oversight panel for bond proceeds; its request to publish mid‑construction audits and to examine large historical payments goes to transparency and potential financial recovery for bond funds.

Next steps: CBOC members asked the board to schedule a walk‑through presentation of the two mid‑construction audits and directed staff to report back on the $12 million security program and the $28 million prepayment. The board indicated it would post audit documents and follow up with its bond manager.