The San Joaquin County District Attorney’s Office is investigating the Stockton Unified School District over possible fraud that came to light in a recent state audit.

The investigation comes in the wake of two grand jury reports and an audit by the Fiscal Crisis and Management Assistance Team, District Attorney Ron Freitas said at a news conference on Monday.

“Our children are our most important resource. Their education and the environment in which they learn is one of my most pressing priorities,” Freitas said. “Make no mistake. Any attempt to commit fraud on the backs of our children will be prosecuted to the fullest extent of the law.”

The state agency had conducted an “extraordinary audit,” which is a comprehensive examination of the fiscal issues of the school district.

The FCMAT report released in February recommended that the San Joaquin County superintendent notify the governing board of SUSD, the state controller, the state superintendent of public instruction, and the county district attorney about the possible findings of fraud and possible violations of the state’s Brown Act laws regarding public meetings.

“Make no mistake. Any attempt to commit fraud on the backs of our children will be prosecuted to the fullest extent of the law.”

District Attorney Ron Freitas

Stockton Unified School District serves almost 40,000 students.

One of the findings from a 2021-22 county Civil Grand Jury report on the district was that its “projections indicated that there would be a budget deficit of more than $30 million in fiscal year 2024-25.”

The report said if the deficit happened, it could prompt layoffs and the elimination or reduction of student programs.

In May 2021, a district employee had met with members of the San Joaquin County Office of Education (SJCOE) to discuss concerns about “procurement irregularities in a contract with IAQ Distribution Inc.”

IAQ Distribution Inc is a distributor of indoor air quality monitoring and disinfection devices.

Three months later, another employee reached out to the county office with similar concerns, the FCMAT report stated.

Early last year, the SJCOE had requested that the state agency conduct the extraordinary audit after the SJCOE received allegations of possible fraud, misappropriation of funds or other illegal fiscal practices at the district.

The total estimated cost of the study was $50,000, according to the report.

The interim superintendent for the Stockton Unified School District, Traci Miller, said Monday that the district welcomed the opportunity for the investigation.

“We are not afraid of this news,” Miller said. “In fact we welcome this news so we can get back to the business of having our focus on student achievement and student learning instead of the adults of this organization getting us sidetracked.”

Miller said the district is happy to have outside investigation, because if there are issues the organization needs to deal with, or if there are adults that are doing something on the backs of the children, then they need to address it.

Victoria Franco is a reporter based in Stockton covering San Joaquin County for Bay City News Foundation and its nonprofit news site Local News Matters. She is a Report for America corps member.

Victoria Franco, Bay City News

Victoria Franco is a Stockton-based reporter covering the diverse news around the Central Valley as part of the Report for America program. As a Stockton native, Franco is proud to cover stories within her community and report a variety of coverage. She is a San Jose State University alumna with a Bachelor of Science degree in Journalism. In her collegiate years she was Managing Editor for the Spartan Daily. From her time at the Spartan Daily she helped lead her staff to California College Media Awards and a General Excellence first place. Victoria encourages readers to email her story tips and ideas at