Morro Bay teacher misused club funds, investigation finds, then got paid $48,000 to resign
An auto shop teacher at Morro Bay High School resigned with a $48,000 severance after an investigation found he repeatedly misused club funds over several years, according to documents obtained by The Tribune and interviews with district administrators.
Over the six years he was employed as the automotive technology teacher at Morro Bay High School, James Bueno allegedly sold vehicles repaired by students in the class without depositing the funds from those sales back into the school account, according to documents from an internal investigation.
Bueno bought car parts for personal use using school club funds, regularly spent more out of the auto club account than budgeted, and gave a car to his mother that was repaired using funds from the school, the investigation report said.
In addition, the investigation found that Principal Kyle Pruitt approved the improper spending by Bueno and may have pressured the school’s club accountant to “take care of Mr. Bueno,” according to investigation documents.
The investigation took place from late September to early October, and was conducted by The SmithGroup, a private investigations firm hired by San Luis Coastal Unified School District attorneys.
Bueno resigned from the school effective Nov. 30.
As part of his settlement agreement with the district, Bueno was paid $50,000 — minus $2,000 for the car he gave to his mom — and neither Bueno nor the district admitted to any wrongdoing in the alleged misuse of funds.
In an interview with The Tribune, Bueno said he was never properly trained in how to do the bookkeeping for the auto shop, he was never made aware that he was doing anything wrong, and all of the money he received from selling repaired cars went back into the program — even if the books didn’t show it.
“I honestly asked myself, ‘Was I doing something wrong?’ ” Bueno told The Tribune. “And I wholeheartedly believe that everything I did, I always put the kids first. I put the community first. I put the school first.”
The San Luis Coastal board of trustees asked that the investigation’s findings be turned over to the San Luis Obispo County District Attorney’s Office “for evaluation as to whether criminal prosecution is appropriate as this matter involves public funds and donations,” board president Chris Ungar told The Tribune via email.
That investigation has since been referred to the Morro Bay Police Department.
Kim McGrath, San Luis Coastal’s assistant superintendent of education services, wrote in an email to The Tribune that the district is “grateful” it was able to “identify that there was a problem and intervene.”
“It is our priority to ensure that our students have access to the funds that they have raised or earned through their activities,” McGrath wrote. “It is also a priority for us to identify if there are any practices that need to be changed to prevent a similar situation from reoccurring in the future.”
Morro Bay High School’s auto shop program spending lacks accountability
Bueno was hired at Morro Bay High School in 2010 as a campus supervisor. He eventually went on to coach the football team, then later the boy’s volleyball team.
In 2015, Bueno was given the opportunity to restart the auto shop program at the school after it had been closed for several years.
His first automotive technology class had four kids, Bueno said. By 2019, he was teaching four classes of 30-plus kids, he said.
“It was a huge success,” Bueno said. “So when the Measure D funds came, they offered to build me a new shop.”
The school district spent $411,313 of the $192.7 million in bonds voters approved in 2014 to renovate the interior of the old bus barn where Bueno was running the auto shop program. That construction was completed in 2016.
The auto shop program is technically a club — which would normally require that student officers be elected to manage things such as fundraising events, meeting minutes and outreach to bring in new members.
But Bueno’s auto shop club didn’t have any student officers. Bueno was the sole officer, according to the investigation report, and ran the auto shop program without any student oversight.
About one year into Bueno’s tenure as the auto shop teacher, “things started looking fishy,” Annette Bunnell, the accountant in charge of all Associated Student Body accounts, told The Tribune.
Bueno would purchase car parts and materials for the auto shop when the account had run dry, Bunnell said, so funds had to be borrowed from other ASB club accounts to make up the difference.
The investigation found that the auto shop account was overdrawn after Bueno made expenditures related to his “personal vehicles including his 2010 BMW, 2014 Ford Truck, Yukon” and a 2001 Volkswagen Beetle that was donated to the school.
That Volkswagen Beetle was repaired in the school’s auto shop over a yearlong period and then given to Bueno’s mom at no cost, according to the investigation. Bueno later paid for that car out of his settlement agreement with the district.
Vehicles fixed and sold, but where did the money go?
Other times, Bueno would sell cars that had been repaired by students and no deposits would be made to the auto shop’s school account, according to the investigation report.
In 2019, Bueno sold a 2004 Ford truck to a Morro Bay community member for $800, according to the investigation report. The check for the truck was made out to Bueno — not the auto shop or ASB — and no funds from the sale of that truck were deposited into the auto shop’s school account, according to the report.
“Due to the lack of specific procedures, no inventory and/or documentation, Mr. Bueno has sold vehicles that were specifically donated to MBHS and funds were not deposited to the auto shop account,” the report said.
Throughout the internal investigation, “it was not clear how many personal or district vehicles Mr. Bueno has sold,” the report said.
Additionally, Bueno sold T-shirts at a school football game as a fundraiser for the volleyball team, Bunnell told investigators.
“The investigative team identified the 1,000 shirts as an expense from an invoice but could not validate that deposits associated with the sale were deposited to the ASB,” the report said.
Over the six years Bueno served as the auto shop teacher, it is unknown how much money he made from the sale of shirts or vehicles donated to the school.
“There’s no telling how much he pocketed,” Bunnell told The Tribune.
Bueno asserts that every dollar he made was put “back into the shop.”
“It’s not like I took that money and bought a bunch of candy,” he said. “I used it for the shop.”
Pruitt, who has served as Morro Bay High principal since 2014, largely oversaw the auto shop transactions alongside Bunnell during Bueno’s tenure.
When the auto shop account would run dry, Pruitt would tell Bunnell to “take care of Bueno” and transfer funds from the ASB general account to the auto shop to make ends meet, she said.
Bunnell told The Tribune that in January 2020, Bueno had about $14 in the auto shop account, but about $1,500 in invoices that needed to be paid out. As he had before, Pruitt told Bunnell to simply transfer money from another ASB account to the auto shop account, she told The Tribune.
Pruitt told investigators that “he probably shouldn’t have let that occur,” and “admitted that he had made a lot of mistakes managing this situation.”
Pruitt has been on paid leave since early December. He will return to his post briefly in March and then transfer to a teacher position starting in July.
Pruitt denied requests for comment from The Tribune.
Bueno defended overdrawing the auto shop account as something that other clubs were also allowed to do.
However, Christin Newlon, San Luis Coastal’s director of human resources, said that other clubs would have fundraisers already approved and scheduled to balance the books. Newlon oversaw the investigation into the alleged misuse of school funds by Bueno.
“It wouldn’t be entirely uncommon to say, ‘Yeah, give them a couple thousand to get the barbecue running, because we know they’re going to make $10,000,’ ” Newlon said. “In the case of the auto program, there were no more fundraisers. So there was no opportunity for him to reimburse this.”
‘I was trying to stop it,’ accountant says
Bunnell told The Tribune she had noticed discrepancies in the auto shop program’s finances throughout the last five years of Bueno’s tenure. She said she had brought up several concerns to Pruitt over the years, but he didn’t do anything.
“He (Bueno) got away with this for so long when I was trying to stop it,” Bunnell said. “(Pruitt) had the final say on a lot of accounting decisions, and when I would keep going to him with these issues, these problems, he would just come back and say, ‘Take care of Bueno.’ ”
The ASB student officers in charge of keeping tabs on all club accounts at the school did not notice anything major until August, according to a person familiar with the matter, and their concerns were then sent to the district office. District Superintendent Eric Prater told The Tribune that San Luis Coastal was made aware of the issues in September.
Prater said that a severe “lack of procedures,” “loose management” and “carelessness” by Bueno caused the financial issues with the auto shop.
Newlon told The Tribune that it’s hard for the district to know how much money could have been lost or misused by Bueno.
“We were not happy with the practices that were going on there,” Newlon said.
Bueno contended he was never trained on how to properly run the auto shop program to ensure all funds were being correctly managed.
“I have nothing to hide, and that thought never even crossed my mind that anything was going on,” Bueno said. “That’s why this whole thing has been just terrible. You have no clue how bad this has been for me.”
When asked by The Tribune whether Bueno received any training in proper bookkeeping, McGrath said “Mr. Bueno is entitled to his opinion.”
McGrath referred further inquiry to the settlement agreement, which says that Bueno “contends that his recordkeeping may have been inadequate, and that he was not properly trained regarding district recordkeeping requirements.”
SLO High auto shop used as a model for future
As part of their examination, investigators looked to San Luis Obispo High School, also in the San Luis Coastal Unified School District, for an example of what a model auto shop program looks like.
In an interview with The Tribune, San Luis Obispo High School Principal Leslie O’Connor said the school has “systems, practices, procedures and protocols to ensure we have the oversight to ultimately support our students.”
Those protocols include mandatory purchase order requests that must be filled out and approved by either O’Connor, an assistant principal or the ASB clerk before any withdrawals are made from the auto club’s account, O’Connor said.
All of the cars that students work on in the auto club at San Luis Obispo High are donated from the community, O’Connor said.
Jeff Lehmkuhl, who has overseen the auto shop program at SLO High for the past three decades, must first go through the necessary steps with the California Department of Motor Vehicles and federal Internal Revenue Service before a car can be brought into the shop and worked on by students, O’Connor said.
When Lehmkuhl wants to sell a car that has been repaired by the students, any check used to purchase the vehicle must be made out to the ASB — not to Lehmkuhl himself, O’Connor said. Those funds are then deposited directly into the ASB account for the auto program, he said.
Additionally, O’Connor said the auto club always has elected student officers that oversee weekly meetings and ensure club funds are being properly spent.
Should any issues arise in the auto club account — such as the club account being overdrawn — the ASB clerk at the school would alert O’Connor and then work to fix it, he said. But O’Connor noted that the auto club’s account has not had a deficit “to his knowledge.”
Lehmkuhl must go through an annual review of the procedures to ensure he understands what must be done to properly run the auto club program, O’Connor said.
New teacher and new standards
In the wake of the problems in Morro Bay, McGrath said, the district is working to “improve practices” at the school.
A new auto shop teacher has been hired, and a source close to the matter told The Tribune that the auto club will no longer be allowed to operate without student officers in place.
The new auto shop teacher has also met with Lehmkuhl for an overview of how things are run there, Newlon said.
Bueno said the investigation into his tenure at Morro Bay High and his resulting resignation “crushed” him.
“If there’s multiple bosses, and one of the bosses sees an employee using the wrong process, then something should have been done,” Bueno said. “They shouldn’t have allowed me to continue doing that, unknowingly doing the wrong things.”
BEHIND THE STORY
MOREBehind our reporting
Tribune reporter Mackenzie Shuman spent more than two months investigating the resignation of Morro Bay High School automotive technology teacher James Bueno and his alleged misuse of school funds.
Click the arrow to see what went into her reporting.
How the story started
Mackenzie got a tip from a reader in December about the resignation of James Bueno from Morro Bay High School. The reader noted that Bueno’s resignation came just before the school’s principal, Kyle Pruitt, went on paid leave.
Mackenzie then looked into Bueno’s background and found that he ran the school’s auto shop program and coached the boy’s volleyball team.
Who was interviewed for this story
After receiving the tip, Mackenzie made a series of phone calls — first to San Luis Coastal Unified School District Superintendent Eric Prater, who often acts as the district’s media liaison. Mackenzie also reached out to Associated Student Body accountant Annette Bunnell and a separate school employee, who asked not to be identified because they were not allowed to speak on the matter.
All three confirmed that there had been an investigation into Bueno regarding his alleged misuse of school auto club funds.
Public Records Act request
Mackenzie made a Public Records Act request on Dec. 18 asking the school district to provide a report from the internal investigation conducted by The SmithGroup, a private firm hired by San Luis Coastal Unified School District attorneys, as well as any severance agreement between Bueno and the district.
It took the district more than two months to send those records to Mackenzie, who received them on Feb. 23.
Once the records were received and Mackenzie analyzed them, she followed up by interviewing Bueno and the district’s director of human resources, Christin Newlon. Mackenzie also asked for comment from the district regarding Bueno’s training, and received written responses from Kim McGrath, the district’s assistant superintendent of educational services.
In her article, Mackenzie provides an in-depth look at how Bueno, with oversight from Pruitt, reportedly mishandled school funds in relation to the auto shop program.
This story was originally published March 4, 2021 at 1:02 PM.
