AUDIT RAPS PROP. BB HANDLING POOR LAUSD SUPERVISION BLAMED, IN PART, FOR SHORTFALL.

Byline: Sonia Giordani Staff Writer

A $600 million shortfall in Proposition BB funds stems from unrealistic cost estimates, outdated repair lists and the Los Angeles Unified School District's ineffective supervision of the $2.4 billion modernization-and- repair program, a report released Wednesday shows.

More than 65 percent of the cost overruns - or about $410 million - involve safety and technology projects, including painting and floor work for which the district never produced estimates.

``In retrospect, it is now very obvious that the original BB contracts for each school were not the product of a well-executed project identification and costing process,'' states the report commissioned by the Prop. BB Blue Ribbon Citizens Oversight Committee, which is charged with monitoring bond expenditures.

The 25-page report was released during the committee's Wednesday meeting.

Superintendent Roy Romer, who attended Wednesday's meeting, said the report clarifies the root causes of the district's $600 million shortfall. What's more, he said, the report underscores the formidable challenges district officials face as they try to regain the public's confidence before asking voters to approve another massive school bond as early as this November.

``We need to have a very close conversation with you and with the public about how we are performing,'' Romer told the oversight committee. ``So in six months, people will say, 'Yeah, this is turned around... They are getting the job done.'''

The report largely blames the previous generation of administrators and credits new facilities managers for implementing procedures to complete the work and prevent additional cost overruns.

``They have been going to a great deal of trouble to find out what the truth of the matter is and to put it out there,'' said Thomas Rubin, the Oakland-based auditor and report author hired by the oversight committee last year.

Richard Katz, a former state assemblyman who pushed voters to support Prop. BB in April 1997, said the district's top priority should be winning back the public trust through reform.

``The school district's got a long way to go to prove to the taxpayers that they can be trusted to spend the money as they promised,'' Katz said.

``The whole idea behind listing specific projects and behind the BB oversight committee was to reassure the taxpayers that they'd get what they were paying for,'' he said.

With the state expected to put a school construction bond measure on the ballot in November, some say Los Angeles Unified must be ready to secure a local bond to gain matching funds.

``If the state puts a major bond measure on the ballot, we will have to go back to the voters to access the funds from the state in order to get our fair share,'' board President Caprice Young said.

While Young conceded the cost overruns in the BB funds will present an uphill battle in capturing voter confidence, she also said the district can do much in the next few months to restore public confidence.

But board member David Tokofsky, who supported Prop. BB, said it's too early to ask voters for more funding.