pinion School Board Wise to Follow Prescribed Process on Audit Findings

This week, school board chair Bob Gause decided to follow board attorney Jim Dye’s advice and not hold a special meeting to answer items in a presentation by internal auditors and staff legal counsel to its audit committee. It’s the first time in recent memory that Gause has taken Dye’s advice, and taxpayers should be grateful.

The people of Manatee County are justifiably tired of being put on the hook for the unnecessary legal expenses incurred by this board, which is too often preceded by members failing to follow the advice of their attorney when it comes to legal matters. It was only recently that the board saddled taxpayers with the additional cost of their own permanent counsel (previously, the staff attorney also advised the board and outside counsel was retained as needed). Taxpayers have a right to question why they should foot the expense for such legal counsel, if it is so seldom put to use.

Gause seemed to be incensed by the findings presented to the audit committee, which he clearly took as a personal attack, rather than the result of the job his board empowered internal auditors Shinn & Co. to perform. It goes without saying that the chair did not come out of the presentation looking good, and the fact that he had previously pushed to consider getting rid of the firm casts a darker cloud over its findings. But the job of the internal audit firm is to perform the duties assigned by the board. That seems to have happened, and no one involved in the process can be blamed just because someone didn’t like what they found.

Let us not forget the very reason we now have an internal audit function that reports to the board. Previously, internal auditors reported to the administration. That dynamic resulted in a litany of financial problems escaping the board’s attention. Both the state and the firm that performed the district’s external audit following its financial implosion of 2012, cited the arrangement as one of the factors that facilitated the financial cover up that followed.

With the auditors reporting to the people who were hiding the deficits, the board was kept in the dark. The irregularities in the bid process revealed on March 18 seemed just the sort of thing that would not have been made public under the old arrangement. If the findings had been hushed or whitewashed just because they could make a board member uncomfortable this time, what would have been gained by the new process?

At the end of the day, a firm that was ranked 8th in an initial ranking of bids for more than $20 million in construction contracts, inexplicably jumped to number one when the list was directed to be thrown out by then-Superintendent Roger Dearing and then-CFO Tim McGonegal. That firm, W.G. Mills (now Gilbane Building Co.) just paid $1.1 million to settle claims that it fraudulently obtained government contracts with the Coast Guard, in the very same year (2009), no less. In 2010, the company's president was also the primary funding source of a 527 PAC that mounted a vicious attack campaign in favor of maintaining a former incumbent on the board.

In that second time around, Mr. Gause, who served on the ranking committee, ranked NDC Construction No. 1 in the initial short-list ranking, with WG Mills No. 2. In the final rankings, which followed their presentations, he flipped the two companies and later motioned to have the projects split and divided between the two, which the committee approved. The board followed suit and unanimously approved the projects as such, with two politically-connected companies splitting a very large bounty. The firm who had been ranked No. 1 in the initial scoring that had been thrown out, Sarasota County’s Balfour Beatty, was left out in the cold.

Mr. Gause then went on to secure a partnership in an engineering firm and build a business relationship with NDC. In fact, the relationship would lead to him recusing himself on votes for other school projects the developer would be involved in. That in itself may not be illegal, but it certainly raises red flags and warrants further investigation considering the unorthodox way that the project in question was awarded and Gause's position on both the board and the selection committee.

The findings revealed at the March 18 meeting combine with other factors to paint a disturbing picture of how business has been conducted by our school district in past years. Also, as auditors noted, this is but one project from one bond (four more bonds issued during the same period have yet to be audited). Given the pervasive lack of controls cited, there is every reason to suspect that the project was not alone in its questionable handling.

A special meeting last week, however, could have very well led to more legal liabilities for taxpayers. As Dye noted in his email to the board, the very language used in the email calling for the special meeting gave reason for concern, as the person mentioned, staff attorney Mitchell Teitelbaum, with whom auditors had brought the findings that they found to be legally questionable, had already invoked the protection of the state’s whistleblower statute when he read them into the record for the committee on the 18th.

Gause has said that he believes an investigation will prove that the bid process was both transparent and legal. Even if that is somehow the case, it would seem he would hardly have cause for indignation that others would be skeptical, given the troubling findings of the audit.

For too long, the Manatee School District was awash in graft and cronyism. Inept administrators loyal to those who had elevated their careers while helping them into tax brackets that were otherwise unthinkable given their thin resumes, together with school board members kept in office by the special interests who profited by their votes, conspired to ensure that the right mouths were lined up at the $700 million trough. This arrangement worked to the benefit of a small clique, at the expense of thousands of students, teachers, administrators and taxpayers who all deserved better.

Since the 2012 revelation that the district had been hiding millions of dollars in shortfalls from the public, taxpayers have been looking for the proverbial stolen money in offshore accounts. As these dealings demonstrate, one need not “steal” anything for theft to have occurred. The pilferage of tax money transpired by way of unqualified drinking buddies being given cushy, high-paying administrative positions, only because of their undoubted loyalty to the status quo; positions being created so that sought-after sport coaches who were not qualified to be teachers could be given full-time employment; and construction contracts being awarded on the basis of cozy relationships, rather than concern for taxpayer value.

The results have been both costly and disastrous. Students have been abused and the abuse ignored by the very people taxpayers pay to protect them. Additional money has been squandered on both the unwarranted payment of legal fees for the offenders and the settlements to the victims. Yes, in the nonsensical wisdom of the Manatee School Board, we the taxpayer foot the bill on both sides of the odious equation. Then of course there is the continual crime of keeping all of this money from the mission it exists to facilitate – the education of our children.

At this point, is it any sort of surprise that the very people who benefited from the status quo of the last decade have been so terribly interested in upending reform? Is it any wonder to see the same old faces who were pushed out when the district hit rock bottom, clawing to regain their spot at the feed box – especially as it begins to replenish?

Schools will soon need to be built in northeast Manatee County. In the very near future, hundreds of millions of taxpayer dollars will be spent on a Parrish high school, another middle school and perhaps multiple elementaries to fill the demand created by relentless development of once rural hamlets. There are clearly certain interests who would like to see the district return to the old way of doing things. Hopefully, the taxpayers have gotten enough of an idea of what that looked like to demand a full investigation, which will be the first step in ensuring that future tax dollars are invested in the education of our children, rather than the bottom line of what Teitelbaum called “favorite sons.”

Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at dennis.maley@thebradentontimes.com. Click here to visit his column archive. Click here to go to his bio page. You can also follow Dennis on Facebook.