Investigation clears Sac City staffer of fiscal mismanagement allegations
Sacramento City Unified School District financial officer Cindy Tao was cleared of allegations of fiscal mismanagement, according to a district investigation.
An investigation conducted by an external law firm cleared Tao of wrongdoing but revealed internal chaos in the business department as the district navigates a potentially devastating financial crisis.
The investigation was launched after a group of employees who identified themselves as a “fiscal integrity group” alleged last year that Tao, the district’s assistant superintendent of business services, made decisions that worsened the district’s devastating financial position and created a hostile work environment. She was the subject of seven anonymously submitted complaints between September and January.
The resulting investigative report, dated March 25, was provided to The Sacramento Bee by Tao and her lawyer Barry J. Bennett. The investigator found seven of the eight allegations against her to be unsubstantiated. The one substantiated allegation regards office culture and is not related to any of the more serious accusations of fiscal mismanagement. She will not face any disciplinary action as a result of this finding.
The anonymous group that sent the complaints has repeatedly declined to speak with The Bee, saying via email that their attorney advised them to not disclose additional information.
Tao has been on administrative leave since early January, one day after The Bee published details about the ongoing investigation. Tao did not respond to a request for an interview, but said via email in January that the allegations were “absolutely false.”
A district spokesperson said the district would let the investigation’s results speak for themselves.
SCUSD investigation finds no fiscal mismanagement
The investigation sought to answer eight questions — five related to an alleged hostile work environment and three related to the allegations that Tao worsened the budget crisis.
One of the most severe accusations lobbed by the group was that Tao and former Chief Business Officer Janea Marking knowingly obscured information about the impending financial crisis from the district board of trustees before approving a new contract with the Sacramento City Teachers Association.
Marking declined to comment for this story. She told investigators that she saw Tao as an “ethical, competent, and transparent” financial leader, according to the report.
The investigation found no evidence that Tao mismanaged district funds, invalidating the group’s claims that Tao presented incorrect information to the board, that she played favorites by hiring friends for positions they weren’t qualified for and that she had conflicts of interests with the consultants she hired.
These findings are corroborated by Marking’s testimony to county officials. Marking told the Sacramento County Office of Education last month that she had in fact warned the board about the structural deficit and encouraged them to start negotiating with the teachers union at a lower cost to the district, according to documents obtained by The Bee. She backed up her claims with the scripts she used during closed bargaining discussions with the board.
“The financial woes of the District, we suspect, can be attributed to many sources, but it should be clear from this report that Ms. Tao was neither in a position to dictate the many policy decisions that contributed to that financial position nor … to be the instrument whereby employees were unlawfully caused to bear the brunt of the fall-out from those unwise policy decisions,” Bennett wrote in a letter to The Bee.
According to the district’s fiscal transparency dashboard, the business services department paid around $1.7 million to third-party contractors in the 2024-25 school year. The investigation found, in conflict with the group’s allegations, that the consultants did not assume any of Tao’s responsibilities.
The report did note, however, that there were general concerns “regarding consultant communication and transparency.” Interim CBO Lisa Grant-Dawson has previously said that she has canceled these contracts.
Report describes strained budget department
One allegation against Tao was substantiated: that she inconsistently enforced an informal rule that allows employees to leave after five hours during times of unusually long days and weeks without going through the formal process associated with leaving early. Tao and her lawyer are seeking to reverse this decision, which came with no disciplinary action, citing the fact that the rule is not listed or defined in any formal district policy.
Of the other workplace-related allegations against Tao, all were found unsubstantiated.
But the report resulting from the investigation describes a budget department under severe strain: long hours, weekend work, staffing shortages and inconsistent rule enforcement all contributed to low morale among staff members as they sought to address the school district’s structural deficit that still threatens to put the district in state receivership.
Employees described “significant emotional and physical stress,” with at least one staffer saying that it negatively impacted their physical and mental health.
“The evidence reflects a high-pressure work environment during a fiscal crisis, marked by organizational restructuring, leadership transition, heightened audit risk, strict deadlines, frequent check-ins, public progress tracking, and emotionally distressing communications,” the report reads.
“Employees reported low morale, communication breakdowns, perceived micromanagement, expanded duties without commensurate training, and concerns regarding ‘Five Hour Rule’ use and documentation practices. Multiple employees reported experiencing emotional and medical impacts, leadership style conflicts, role confusion, and deterioration in morale.”
Investigators said that while workloads were intense, hours were long (often extending into the evenings and weekends) and oversight increased, these outcomes reflected the intensity of the workload, not Tao or Marking violating law or district policies. The report notes that the district took steps to address workload concerns when they were elevated.
Lack of leadership during budget deficit
The board has been frustrated with business staff, namely Grant-Dawson, and their performance navigating the deficit, which has grown as the interim CBO has uncovered more structural budget problems.
With Marking’s departure in December and Tao’s placement on administrative leave within a few days of Grant-Dawson starting at the district, there has been a significant leadership gap in the department when stability is needed most.
Grant-Dawson was told when she was hired by former superintendent Lisa Allen that she would do “fixer” work on the budget while a new permanent CBO would lead the department, but the board kept the position frozen until March.
The district has hired two retired former school district CBOs to assist Grant-Dawson. In March, the board tried to hire a consulting firm to offer additional manpower to the department, but was thwarted by their assigned financial advisor from the county, who blocked the contract.
Grant-Dawson will present an updated fiscal solvency plan at Thursday night’s board meeting.
