A Phoenix Union audit found a history of nepotism in hiring and promotions

The Phoenix Union High School District contacted the Arizona Auditor General on Friday to report “possible fraud and misuse of funds” after an external audit found evidence of problematic hiring and promotion practices.

The audit was commissioned by the Phoenix Union because of community concerns about a culture of nepotism in the district, according to board President Seiche Napa, who joined the board in January 2023.

The audit found that several employees were promoted up the salary scale without board approval, resulting in salary increases, that district administrators were appointed to positions “without an interview and selection process,” and that district staff “skipped internal approval processes ” in the hiring or promotion of employees, wrote Jennifer McLellan, the district attorney, in a letter to the auditor general.

“Most of those employees who could have benefited from the county’s failure to follow processes are related to each other by blood or marriage,” McLennan wrote.

The district has identified about a dozen employees to be reviewed by an outside auditor, some of whom were hired or promoted between fiscal years 2019-20 and 2023-24, according to the audit. For six administrative vacancies between fiscal years 2020 and 2023, the positions were filled “without advertisement” and candidates were selected without confirmation that they had passed an interview. Those positions included chief of staff and chief development officer, according to the audit.

The letter states that the district estimates the potential cost of the issues identified during the audit “could exceed $650,000.”

“That funding could have gone directly to teachers, directly to students, directly on campuses,” Napa said.

In her letter, McLellan wrote that the district has asked her to investigate “who may have approved the unauthorized raise,” adding that she hopes to complete the investigation in November.

According to McLellan’s letter, the district has taken a number of steps to correct problematic hiring and promotion practices this year since February, when the first part of the audit was completed. The second phase of the audit, which focused on problematic family hiring and promotion practices in the district, was completed on September 25.

Reform efforts described by McLellan included a planned annual audit of the human resources department and a conflict-of-interest policy that was unanimously approved by the board in August. This policy prohibits employees from supervising or evaluating family members and does not allow family members to work in the same workplace and be evaluated by the same person at the same time.

Phoenix Union is also now interviewing all employees to determine family relationships, McLellan wrote, and is evaluating how to correct the problems identified in the report, including “correcting promotions not approved by the Board; adjustment of salary placement; removal of unauthorized benefits; initiating a recovery effort.”

The district “is committed to using all legal means to eliminate overpayments,” McLellan wrote. She said the district is seeking input from the auditor general on developing a corrective action plan.

Two employees named in the review — a former chief of staff and a former director of development — resigned over the summer. After the audit was completed in September, three additional employees were placed on administrative leave, according to a district spokesperson.

McLellan wrote that leadership changes were among the steps the district is taking, and noted that former superintendent Chad Hestson is no longer with the district.

Hestson, who announced his resignation in March 2023 for a position at Northern Arizona University, said in a statement that he was not aware of any fraud or allegations of fraud. He did not immediately respond to a request for additional comment when he provided a copy of the letter and the audit.

The current superintendent, Thea Andrade, became the district’s interim superintendent in May 2023 and as its head in March 2024. She has been with the district since 2011 and was previously its chief advancement officer.

President of the board: External audit is caused by community problems

Napa said the concern about nepotism comes from “the entire community” and hopes the district can rebuild trust.

At the end of 2023, when the district was searching for its new superintendent, a survey of more than 1,800 people — including more than 600 parents, 260 community members, 255 current or former students, and a number of staff and administrators — found that questions “remain about policies and practices hiring”.

“Such terms as nepotism and nepotism “Several groups shared a desire for clarity, consistency, and education on recruitment, hiring, and employment policies and practices that ensure equal access and opportunity.”

During the first reading of the revised conflict of interest policy in June, Andrade described the policy changes as “minor changes,” saying that “we’ve been asked repeatedly to look at the personnel relationship, the conflict of interest — I believe it’s been advertised as a nepotism policy — to the board, to really dig into it and look at the current policy and where it might change.”

Napa said she hopes the ongoing investigation will determine “how these things actually happened.”

“It is the leaders who create the culture. These are leaders who are either knowingly doing it or turning a blind eye to it,” Napa said, adding that she hoped they would be “held accountable.”

Contact the reporter at [email protected].