LAUSD Receives $15 million Settlement in Payroll Disarray

November 26, 2008

Los Angeles, CA – The Los Angeles Unified School (LAUSD) officials have accepted a settlement of around $15 million for the district in its suit against Deloitte & Touche they said last Wednesday, a LAUSD official said.

The lawsuit arose from the complaint of a flawed payroll system that has left thousands of school employees without pay and who continues to receive invalid checks.

According to the officials, Deloitte will pay an amount of $ 8.25 million and not collect invoices amounting to around $7 million. The amount is much less than they have first hoped to get back after they have paid $95 million for the system and some $37 million to fix it.

Roberta Fesler, an attorney for the district said, "We thought they owed us over $30 million, and they thought they owed us nothing."

Dave Holmquist, Chief Operating Officer of LAUSD said that the district might seek money to improve on the faulty payroll system and not get back the damages to school employees who went without pay when the system was first implemented in January 2007.

The settlement amount was reached in October but it was officially signed only last Wednesday morning, said Holmquist.

A third phase of the payroll system which would administer district purchasing was set to be implemented in January 2009, but Holmquist said that it is now doubtful whether it will be rolled out in the new year.