The Houston school board launched two external audits of the district’s procurement practices during the last three months to address questions about possible favoritism and trustee influence in the awarding of contracts.
But some question whether the two audits will help.
“There's nothing better than the light of day,” said Trustee Anna Eastman, who represents HISD District I, in explaining why she called for a procurement audit in August.
“Every public institution is under high levels of scrutiny right now, and as I hold my kids to pretty high standards, I think our public institutions should be held to those same standards,” Eastman continued. “A thorough look by an independent party just keeps us on our toes.”
On the other hand, there’s Travis McGee, for example, a vocal critic of the Houston Independent School District trustees. He has serious reservations about one of the audits.
And former HISD procurement chief Stephen Pottinger told Texas Watchdog that the real source of the problem isn't in the procurement department. It’s elsewhere in the district’s finance office – the same finance office that recently received an award for outstanding service from a nonprofit organization that is conducting one of the audits.
“I believe an audit done by the council will be a bigger joke than HISD's conflict of interest policies or the lack of,” said McGee, referring to the Council of the Great City Schools, the Washington, D.C.-based nonprofit organization.
“This is the same council that Grier sat on,” McGee said.
HISD Superintendent Terry Grier is a member the council’s executive committee.
McGee is president of the Sunnyside Gardens and Bayou Estates Civic Club. A barber and neighborhood activist, he lives in HISD District IV, represented by board President Paula Harris.
Due in part to Trustee Larry Marshall’s strenuous objections to stronger language added to a revised board ethics policy – and his assertion that a new ethics policy is not needed at all – the school board tabled indefinitely a vote on the policy earlier this month.
And that was after trustees met twice to write a better board ethics code.
The school board is looking for the source of its purchasing concerns in the wrong place, Pottinger argued.
“All the problems that are occurring are occurring outside the procurement department,” Pottinger told Texas Watchdog during a series of interviews during the last four months. “And yet the smokescreen is that they’re going to audit the procurement department.”
The “request for qualifications” the district released in August to outline the scope of the planned audit did not include an examination of any potential influence exerted by the district’s superintendent or chief financial officer.
But that doesn’t mean that topic isn’t fair game, one HISD trustee said.
“My opinion is that we look at everything that has to do with procurement,” said Mike Lunceford, who represents HISD District V, and who chairs the board’s audit committee.
Chief Financial Officer Melinda Garrett chose not to renew Pottinger’s contract in July. He had been employed by the district for more than 11 years -- all of them as head of procurement.
HISD officials accused Pottinger of playing inappropriate practical jokes on a subordinate, including signing up the employee on a Russian online dating site without the employee’s knowledge. They also accused Pottinger of allowing expensive supplies to pile up in the district’s warehouse -- about $800,000 worth of hand sanitizer that was near its expiration date, being one example.
Pottinger called those accusations false.
Flaws exist in HISD’s spending practices – specifically, a lack of regulation, Pottinger said. He cited district accountants who currently handle some contract-award work.
“Accountants are not concerned if something has been bid, if the price is a good price, if it’s a (minority-owned company), if they have insurance, if they have bonding – they’re accountants,” he said. “They’re not educated in selecting a vendor and negotiating a price.”
Garrett referred Texas Watchdog’s questions to HISD spokesman Jason Spencer, who said, “The existing public record on this personnel matter is comprehensive and speaks for itself.”
That’s why the procurement department is supposed to exist, “to ensure a level playing field, competition exists and (there is) fair and equal treatment of all suppliers,” Pottinger said. “There’s an evaluation process with bids.”
“When you bypass all those checks and balances,” Pottinger continued, “all of those controls, you’ve created an environment with the potential of what exactly is going on: No oversight.”
Actions by Marshall and Harris have been among the troubling contract-awarding issues that led to the board commissioning the two audits.
Marshall has been accused in civil court filings of accepting bribes and kickbacks from HISD contractors. He has called the lawsuit against him “baseless” and “without merit.” He has not been charged with any crime.
However, Marshall himself has admitted previously he set up a meeting between himself, Grier, Garrett and Dr. Kenneth Wells, a local doctor with whom Marshall had traveled to Costa Rica on a trip arranged by an HISD vendor. HISD then began the process of contracting with Wells to hire him as a consultant on health care issues.
HISD officials were about to award a $640,000 no-bid contract to Wells, despite not knowing precisely what Wells was going to do for the district.
Due in part to questions about the deal raised by Texas Watchdog, HISD officials have put the negotiations on hold.
And Harris has voted multiple times on district contracts with businesses run by a close friend. She also asked the district’s former procurement director to arrange a meeting with two vendors, records show.
Harris did not return phone or e-mail messages for comment for this story. She has not returned any Texas Watchdog message seeking comment since Aug. 4.
Lunceford oversaw the hiring of Houston-based accounting firm Null-Lairson as the other external auditor. The board approved a maximum of $87,500 to pay for that firm’s review.
Lunceford said the Null-Lairson audit began last month.
“They said it would take 30 to 60 days to gather the data and one month to write (the report) up,” he said.
The Council of the Great City Schools conducted its audit in October, said Henry Duvall, an organization spokesman.
That review will cost HISD nothing, Grier said.
But some parents, such as McGee, asked why district officials needed the council’s audit if it were already paying for the Null-Lairson audit.
The council comprises “65 big-city school districts that are members of the only national organization exclusively representing the needs of urban public schools,” Duvall said. The council’s funding comes from member dues and sponsor contributions, grants and contracts, he said.
Its audit report could be released at any time. “There isn’t a specific deadline,” HISD spokesman Jason Spencer told Texas Watchdog.
***
Contact Mike Cronin at mike@texaswatchdog.org or 713-228-2850. Follow him on Twitter at @michaelccronin or @texaswatchdog.
Keep up with all the latest news from Texas Watchdog. Fan our page on Facebook, follow us onTwitter and Scribd, and fan us on YouTube. Join our network on de.licio.us, and put our RSS feedsin your newsreader. We're also on MySpace, Digg, FriendFeed, and tumblr.
Photo of abacus by flickr user matsuyuki, used via a Creative Commons license.
“There's nothing better than the light of day,” said Trustee Anna Eastman, who represents HISD District I, in explaining why she called for a procurement audit in August.
“Every public institution is under high levels of scrutiny right now, and as I hold my kids to pretty high standards, I think our public institutions should be held to those same standards,” Eastman continued. “A thorough look by an independent party just keeps us on our toes.”
On the other hand, there’s Travis McGee, for example, a vocal critic of the Houston Independent School District trustees. He has serious reservations about one of the audits.
And former HISD procurement chief Stephen Pottinger told Texas Watchdog that the real source of the problem isn't in the procurement department. It’s elsewhere in the district’s finance office – the same finance office that recently received an award for outstanding service from a nonprofit organization that is conducting one of the audits.
“I believe an audit done by the council will be a bigger joke than HISD's conflict of interest policies or the lack of,” said McGee, referring to the Council of the Great City Schools, the Washington, D.C.-based nonprofit organization.
“This is the same council that Grier sat on,” McGee said.
HISD Superintendent Terry Grier is a member the council’s executive committee.
McGee is president of the Sunnyside Gardens and Bayou Estates Civic Club. A barber and neighborhood activist, he lives in HISD District IV, represented by board President Paula Harris.
Due in part to Trustee Larry Marshall’s strenuous objections to stronger language added to a revised board ethics policy – and his assertion that a new ethics policy is not needed at all – the school board tabled indefinitely a vote on the policy earlier this month.
And that was after trustees met twice to write a better board ethics code.
The school board is looking for the source of its purchasing concerns in the wrong place, Pottinger argued.
“All the problems that are occurring are occurring outside the procurement department,” Pottinger told Texas Watchdog during a series of interviews during the last four months. “And yet the smokescreen is that they’re going to audit the procurement department.”
The “request for qualifications” the district released in August to outline the scope of the planned audit did not include an examination of any potential influence exerted by the district’s superintendent or chief financial officer.
But that doesn’t mean that topic isn’t fair game, one HISD trustee said.
“My opinion is that we look at everything that has to do with procurement,” said Mike Lunceford, who represents HISD District V, and who chairs the board’s audit committee.
Chief Financial Officer Melinda Garrett chose not to renew Pottinger’s contract in July. He had been employed by the district for more than 11 years -- all of them as head of procurement.
HISD officials accused Pottinger of playing inappropriate practical jokes on a subordinate, including signing up the employee on a Russian online dating site without the employee’s knowledge. They also accused Pottinger of allowing expensive supplies to pile up in the district’s warehouse -- about $800,000 worth of hand sanitizer that was near its expiration date, being one example.
Pottinger called those accusations false.
Flaws exist in HISD’s spending practices – specifically, a lack of regulation, Pottinger said. He cited district accountants who currently handle some contract-award work.
“Accountants are not concerned if something has been bid, if the price is a good price, if it’s a (minority-owned company), if they have insurance, if they have bonding – they’re accountants,” he said. “They’re not educated in selecting a vendor and negotiating a price.”
Garrett referred Texas Watchdog’s questions to HISD spokesman Jason Spencer, who said, “The existing public record on this personnel matter is comprehensive and speaks for itself.”
That’s why the procurement department is supposed to exist, “to ensure a level playing field, competition exists and (there is) fair and equal treatment of all suppliers,” Pottinger said. “There’s an evaluation process with bids.”
“When you bypass all those checks and balances,” Pottinger continued, “all of those controls, you’ve created an environment with the potential of what exactly is going on: No oversight.”
Actions by Marshall and Harris have been among the troubling contract-awarding issues that led to the board commissioning the two audits.
Marshall has been accused in civil court filings of accepting bribes and kickbacks from HISD contractors. He has called the lawsuit against him “baseless” and “without merit.” He has not been charged with any crime.
However, Marshall himself has admitted previously he set up a meeting between himself, Grier, Garrett and Dr. Kenneth Wells, a local doctor with whom Marshall had traveled to Costa Rica on a trip arranged by an HISD vendor. HISD then began the process of contracting with Wells to hire him as a consultant on health care issues.
HISD officials were about to award a $640,000 no-bid contract to Wells, despite not knowing precisely what Wells was going to do for the district.
Due in part to questions about the deal raised by Texas Watchdog, HISD officials have put the negotiations on hold.
And Harris has voted multiple times on district contracts with businesses run by a close friend. She also asked the district’s former procurement director to arrange a meeting with two vendors, records show.
Harris did not return phone or e-mail messages for comment for this story. She has not returned any Texas Watchdog message seeking comment since Aug. 4.
Lunceford oversaw the hiring of Houston-based accounting firm Null-Lairson as the other external auditor. The board approved a maximum of $87,500 to pay for that firm’s review.
Lunceford said the Null-Lairson audit began last month.
“They said it would take 30 to 60 days to gather the data and one month to write (the report) up,” he said.
The Council of the Great City Schools conducted its audit in October, said Henry Duvall, an organization spokesman.
That review will cost HISD nothing, Grier said.
But some parents, such as McGee, asked why district officials needed the council’s audit if it were already paying for the Null-Lairson audit.
The council comprises “65 big-city school districts that are members of the only national organization exclusively representing the needs of urban public schools,” Duvall said. The council’s funding comes from member dues and sponsor contributions, grants and contracts, he said.
Its audit report could be released at any time. “There isn’t a specific deadline,” HISD spokesman Jason Spencer told Texas Watchdog.
***
Contact Mike Cronin at mike@texaswatchdog.org or 713-228-2850. Follow him on Twitter at @michaelccronin or @texaswatchdog.
Keep up with all the latest news from Texas Watchdog. Fan our page on Facebook, follow us onTwitter and Scribd, and fan us on YouTube. Join our network on de.licio.us, and put our RSS feedsin your newsreader. We're also on MySpace, Digg, FriendFeed, and tumblr.
Photo of abacus by flickr user matsuyuki, used via a Creative Commons license.
Like this story? Then steal it. This report by Texas Watchdog is licensed under a Creative Commons Attribution 3.0 United States License. That means bloggers, citizen-journalists, and journalists may republish the story on their sites with attribution and a link to Texas Watchdog. If you do re-use the story, e-mail news@texaswatchdog.org.
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