Schools and Education FBI Declines to Look Into Allegations of School District Bond Fraud from 2009

BRADENTON — The FBI has declined at this time to investigate whether school district bond funds from 2009 were fraudulently dispersed, Byron Shinn of Shinn & Co. told the Manatee School Board on Tuesday.

Information on the matter was sent to the bureau after its White Collar Crimes Unit contacted the district about conducting an investigation, district attorney Mitch Teitelbaum advised.

"As you recall, we were requested to supplement the earlier work performed by an independent auditor and trace disbursements of bond proceeds to the accounting records and to the contract request for the approved projects that were identified in the 2009 COPS [Certificates of Participation] document," Shinn explained to the board.

The independent auditor, Tampa's Oscher Consulting, gave the district a draft report in May and the same report to the school board in June. Shinn said that the Oscher report "concluded that the bond proceeds were used and expended for various district projects with open questions regarding documentation and certain expenditures." This included revelations that some of the bond money was used for improvements at Myakka City Elementary school, which was not listed as a project the bond funds would cover.

Shinn described two meetings with bureau agents. He said they focused on the bidding process and "whether any bond funds were disbursed in a fraudulent manner." Shinn said the FBI informed the firm that because some of the items shared with them would be of an ethical rather than criminal nature, they would not be in their scope of responsibilities.

At one point, board chair Bob Gause questioned why the situation was escalated to the federal level in the first place, though Shinn had already noted that "the FBI had already reached out to the district in connection with this review," before the board entitled Teitelbaum to have Oscher's draft report and supporting documents turned over to law enforcement for review, in what Shinn called "an abundance of caution."

"The school district was not the one who first contacted the FBI, but rather vice versa," Teitelbaum told TBT. "It was the FBI White Collar Crimes Unit that contacted the district regarding conducting an investigation."

No explanation was given during Shinn's presentation as to the specifics of the ethical questions raised in the bidding process, though a complete update, including expanded work that has been done since the Oscher report, will be presented to the Audit Committee by Shinn in March.