In recent years, oversight committees have been appointed for the purpose of reviewing the expenditures of revenues generated by local school and/or community college bonds.

Oversight committees currently exist for bonds related to Allan Hancock College and the Santa Maria Joint Union High School District.

What is an oversight committee?

It's an appointed citizens' watch-dog group acting on behalf of taxpayers. It is not granted any real powers by the state, but is permitted access to all financial data relative to the subject bond, with specific exceptions, as well as access to construction areas, etc., associated with projects supported by those bond revenues.

While an oversight committee has no official powers, it does have an obligation to report to the public any misuse of funds it discovers while performing its financial reviews. It must also report to legal authority any evidence of criminal activity related to the expenditure or allotment of bond revenues.

In addition, an oversight committee may be called to report to the civil grand jury on the performance and due diligence of both the district receiving the bond revenues and the oversight committee itself.

Why were oversight committees formed?

In years past, when taxpayers voted to approve school and community college district bonds in order to acquire funds for new construction and/or upgrades, there was no independent oversight to verify proper accounting regarding bond expenditures.

It was later discovered that there were a number of problems relative to misappropriation and misdirection of funds as well as contractor non-performance issues that resulted in a loss of several million dollars to the districts, and subsequently to the taxpayers.

To alleviate this problem, the state now requires oversight committees be appointed for each of these bonds, and further stipulates that the subject bonds cannot be sold until the oversight committee is appointed.

Who serves on oversight committees?

Oversight committees are appointed by the board of trustees of the district for which the bonds are issued, and consist of non-compensated volunteers from within that district. In some cases, the authority to appoint new members is given to the committee, and those appointments are ratified by the district board.

There are certain requirements the oversight committee must meet. For example, in the case of a school bond, there may be a requirement for at least one committee member to be a parent of a student within that school district, or for one to be a member of a bonafide taxpayer organization, or a member of the local business community, etc.

In the event these requirements cannot be met, the committee may still be authorized to function, as long as there is ongoing active recruitment to satisfy these requirements.

Finally, no committee member may be an employee of or contractor to the district issuing the bond, or be in any other position that might produce a conflict of interest.

Oversight committees therefore serve to improve the accountability process regarding bond revenues by ensuring due diligence in the allocation of your taxpayer dollars.

Hugh Rafferty is chairman of Committee INC, and serves on the boards of the Santa Barbara County Taxpayers Association and CoastHills Federal Credit Union.