Houston ISD plans changes to make contracting more open; trustees to vote Thursday on hiring ethics consultants

cash register

Two recent audits of the ways Houston public schools officials do business will lay the groundwork for sweeping revisions to the Houston Independent School District’s methods of buying goods and services.

For example, HISD trustees and the public will be able to view documents that district officials use when they evaluate and grade contractors who bid on jobs with the district, Melinda Garrett, HISD’s chief financial officer, told the Houston school board during a meeting on Monday. That would underscore the requirement already in the state Public Information Act to make records available promptly.

That’s just one of the approaches to improve HISD governmental transparency that Garrett and her team plan to suggest in a report to the board within a few weeks, she told Texas Watchdog after yesterday’s meeting.

“We are working on our recommendations which we will cover with the superintendent soon,” Garrett said. “We will be addressing all items in the reports.”

Other reforms the chief financial officer mentioned include archiving HISD procurement department documents and standardizing the forms HISD officials use to solicit competitive bids for projects, Garrett said.

Precedent exists for the scale of change district officials currently contemplate. A 2010 audit of the HISD capital facilities program caused board members and administrators to merge departments, hiring a pool of on-call custodians and the re-establishment of a preventive-maintenance program.

The proposals come as district leaders consider whether to put a bond referendum to the voters for new school construction and renovations. Superintendent Terry Grier floated that idea earlier this year.

Null-Lairson PC, a Houston accounting firm, conducted a four-month, $87,500 audit of district procurement practices and issued its report in March. Null-Lairson merged with a Dallas-based accounting and consulting firm, Whitley Penn LLP, earlier this month.

The Council of the Great City Schools, a nonprofit based in Washington, D.C., completed a weeks-long audit in October. It cost $16,000.

Both audits criticized HISD’s lack of transparency.

Null-Lairson auditors said questions arose in how district officials disseminated information about bids for work with the district among the public, board members and its own staff. They also found that “defined procedures” didn’t exist that outlined when and how board members and vendors may contact one another.

Particularly disturbing was Null-Lairson’s finding that documents went missing during its audit of HISD. Trustee Juliet Stipeche immediately called for an investigation. She told Texas Watchdog in March that a document’s chain of custody is critical to ensuring no one is tampering with public information.

HISD Inspector General Robert Moore said last month that the investigation was complete and a report would be completed by the end of April. But Stipeche said she has yet to receive the report.

The council’s review stated that HISD business practices “lead to a perception of manipulation of and distrust in the procurement process.”

Board Vice President Anna Eastman called for an independent audit in August.

Both reviews came after Texas Watchdog reported on seven cases where HISD trustees were accused of unethical or improper behavior.

District trustees are scheduled to vote Thursday night on whether to pay up to $35,000 to consultants to rewrite procurement and ethics policies.

Those consultants are from Whitley Penn and two other companies that assisted Null-Lairson with its audit – the Florida-based MGT of America and Houston certified public accountant Susanne Mariga.

HISD officials told Eastman yesterday that consultants would take between 45 and 60 days researching best practices at school districts around the country before rewriting existing policies.

Stipeche, who also is a member of the board audit committee, said yesterday that the committee recommends the board approve the hiring of the three firms.

Contact Mike Cronin at mike@texaswatchdog.org or 713-228-2850. Follow him on Twitter at @michaelccronin or @texaswatchdog.

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Photo of cash register by flickr user jm3, used via a Creative Commons license.

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