"Lack of detailed attention towards inventory controls has exposed K-12 school districts and community college districts to potential security and financial risks," the report concluded. "Students cannot succeed without the proper support of technology and equipment. Therefore, districts should place an emphasis on controlling assets and avoid using funds to replace equipment that would be better spent supporting students' education."

About $288,000 in losses at a county school district due to suspected theft, fraud and administrative errors prompted the Santa Clara County Civil Grand Jury to examine how well each of the county's 33 school districts and four community college districts tracked their inventory. In many districts, including Gilroy Unified School District and Gavilan Joint Community College District, the results were not up to par.

"When proper controls are lacking, the school districts are subject to loss and theft of assets," according to the report. "Replacements of items would come from operating revenue, which is a waste of funds that should otherwise have been spent for planned teacher/student resources."

The Santa Clara County Civil Grand Jury is an investigatory body comprised of 19 citizens selected by the court to serve a one-year term. Their primary responsibilities are to serve as civil watchdog, to look into citizen complaints and to hear criminal investigations.

According to the report, K-12 trustees were unaware of their obligations under the law and had not been trained in inventory control and superintendents reported incomplete inventory information to their boards. In addition, districts failed to reconcile current inventories with past inventories, did not have board policies regarding inventory and did not track items over $500, as required by law. These problems persist in Gilroy and throughout the county, according to the report.

Although GUSD Superintendent Deborah Flores did not know how much money the district loses each year due to theft and inventory errors, she said her administration would take the Grand Jury's recommendations to heart. Flores was, however, surprised that the Grand Jury report expected superintendents and trustees to know the minute details of inventory practices. The business office is usually responsible for many of the duties outlined in the report and the newly appointed director of fiscal services will likely inherit many of the inventory obligations, Flores said.

Following the Grand Jury's recommendations shouldn't be too difficult, Flores said. The report advised GUSD to conduct inventory according to Education Code requirements at least once every two years, track each piece of equipment valued at more than $500 and implement a board policy outlining inventory practices.

"I think it will be easy to address - we just need a system to do it," Flores said.

Although it doesn't relate directly to inventory practices, the easiest recommendation to follow is one regarding approval of the superintendent's expenditures, Flores said. The Grand Jury found that superintendents' purchases in all districts were approved by subordinates. The Grand Jury recommended that these expenditures go through trustees for approval.

"The (Grand Jury) feels there is the potential for abuse," the report stated.

Like many other superintendents, Flores said she sticks to her budget.

"I'm not one of those people who buys extravagant furniture or goes to lots of conferences," she said. "I'm not sure why this is even an issue. It's a non-issue in our district."

Gavilan College President Steven Kinsella doesn't have a problem with the Grand Jury's recommendation either, said Gavilan spokeswoman Jan Bernstein Chargin.

"It's a good idea and doesn't cost anything," she said.

On the other hand, costly recommendations deserve closer scrutiny before being implemented, Bernstein Chargin said.

In the last five years, the college has lost or had stolen from it about $30,000 worth of equipment. But applying the Grand Jury's recommendation of tracking each item worth more than $1,000 - rather than the current practice of tracking items valued at more than $5,000 - could cost more than it saves, Bernstein Chargin said. A cost-benefit analysis will determine which recommendations Gavilan puts into effect, she said.

"The cost of doing what they're saying might not outweigh the savings," she said.

To read the entire grand jury report, click here