Bishop & Associates forensic audit completed
A forensic audit by Michael Bishop & Associates was completed. According to multiple sources, the audit found that for four years (2022-23 through 2025-26), the district had not set employee contributions in accordance with the Collective Bargaining Agreement and consequently covered more of the total annual cost than the CBA permitted. The total overpayment was quantified at approximately $1,770,000, with the current year contributing $840,000. The audit explicitly left the legal determination of whether non-compliance constituted material breach or impropriety outside its scope, noting that determination required legal review. Per Sensible Laguna and the LBI guest opinion, the auditor noted that union members on the district's Health and Welfare Insurance Committee had at least five years in which to raise the issue and seek a lawful resolution.
Citations (13)
- Sensible Laguna · Gary Kasik, Steve McIntosh
The forensic accounting firm stated that LBUSD did not set employee contributions according to the language contained in the CBA, and consequently the district covered more of the total annual cost than it should have. They went on to say that whether this lack of compliance is evidence of a material breach or impropriety requires a legal review and conclusion (outside the scope of what they were asked to do).
- GUEST OPINION: Laguna Beach Schools — The $1.77M Healthcare Controversy Explained op-ed Laguna Beach IndependentLaguna Beach Independent · Steve McIntosh · 2026-03-16
- Manufacturing Outrage: How Union Leaders Hid Their Role in the LBUSD Employee Healthcare Overpayments advocacy George's SubstackGeorge's Substack · George Weiss · 2026-05-09
Completed in September 2025 by Michael Bishop & Associates, the audit confirmed the scope of the problem. For four consecutive years, the district had failed to set employee contributions in accordance with its own labor agreements. The overpayments, originally calculated at approximately $1.77 million, had been embedded in annual district budgets without proper disclosure to the board or the public.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2026-03-26-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-07-24-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-08-14-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-09-11-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-09-25-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-10-09-regular for a transcript-derived summary.
- Laguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-11-13-regular for a transcript-derived summary.
- Annual Organizational Meeting + Regular Board Meeting (Open Session) — Dec 11, 2025 primary Laguna Beach Unified School DistrictLaguna Beach Unified School District
LBUSD recording of the meeting; see /meetings/2025-12-11-regular for a transcript-derived summary.
- H&W Benefits Overpayment and Corrective Action (Board Presentation) primary Laguna Beach Unified School District — Business ServicesLaguna Beach Unified School District — Business Services · 2025-11-13
LBUSD H&W District Costs and Excess Contribution, year by year: 2020-21 $4.53M vs $4.68M cap (−$0.15M under); 2021-22 $5.19M vs $5.42M cap (−$0.23M under, plus $0.35M unappropriated MOU); 2022-23 $5.55M vs $5.44M cap (+$0.11M over); 2023-24 $5.29M vs $5.02M cap (+$0.27M over); 2024-25 $5.75M vs $5.19M cap (+$0.55M over); 2025-26* $6.11M vs $5.27M cap (+$0.84M projected over). Gross over-payment sum 2022-23 → 2025-26: $1.77M. Net cumulative excess after offsetting 2020-21 + 2021-22 under- payments and unappropriated $350K MOU: ~$1.04M.
Slide 7 of the November 13, 2025 LBUSD Business Services board presentation, prepared by CBO Roychowdhury from the Bishop & Olafson independent audit. The same chart anchors both the $1.77M and $1.04M figures used in subsequent coverage.
- The Math Behind the Outrage op-ed FUEL — Families Unified for Education in Laguna (republishing Laguna Beach Independent letter)FUEL — Families Unified for Education in Laguna (republishing Laguna Beach Independent letter) · Erika Hennon Rule · 2026-03-20
District staff brought this issue to public attention and commissioned an independent review. The review found a compliance and internal controls problem, but...did not find evidence of fraud, theft, or funds being 'diverted.' After completing the full reconciliation, the number brought forward for corrective action was $1.04 million.
Rule's letter to the Laguna Beach Independent (published 2026-03-20), responding to Steve McIntosh's March 16 Indy guest opinion. Cites the audit's own framing of internal-controls failure and argues the $1.04M reconciliation figure is the appropriate one for action.