A regular reader of DeKalb School Watch blog sent us a copy of the Grand Jury Presentment issued on 4 May 2012. If we had not seen the official stamp on the document, we would have thought it was a joke. Maybe we could take care of the deficit by making a screenplay out of this. It can’t be non-fiction because no one would believe this really happened. One thing, though – unlike Dragnet, we won’t have to change the names to protect the innocent.
See below for the DeKalb County School System portion of the presentment – and our comments, flush right, italicized and in red …
DeKalb County Schools Superintendent
On March 20,2012 we had the opportunity to meet with Dr. Cheryl Atkinson and discuss her views on the state of the DeKalb County School System. District Attorney Robert James also joined our discussion and both were extremely cooperative and provided the Grand Jury with their insights.
Dr. Atkinson clearly realizes that there are many issues within the school system that must be addressed. Included in these issues are the “friends and family” mentality of hiring and contract bidding, allocation of resources to match skills with needs and overall fiscal responsibility.
[Actually, the issue is fiscal irresponsibility. Atkinson must be FOR “friends and family” hiring since all jobs on PATS apparently are to be filled internally. ]
We discussed the issue of performing regular background checks on employees of theDeKalb County School System. Those who work with and among our children should havebackground checks performed on an annual basis to ensure that people with criminal records are not permitted to work for the school system. One glaring example of the need to complete frequent background checks relates to the case of Bobbie Neil Ward, who was working for Cedar Grove Middle Schoolas a secretary until her arrest in March 2012. Ms.Ward had previously been arrested in DeKalb County in 2005 and yet was somehow permitted to work within the school system.
[Speaking of “friends and family,” has anyone determined Bobbie Neil Ward’s connection? A 2-minute search online brought up her mug shot and charges from as recently as 2010 and early 2011. DCSS HR could not do the same thing? Oh. Right. Gross incompetence.]
This Grand Jury indicted Ms. Ward in March 2012 on 29 counts, including the abuse of disabled adults, aggravated assault, identity fraud and exploitation of the elderly. It is alleged that Ms. Ward was running a home health services business for the elderly, while she was also employed by the school system. The children ofDeKalbCountydeserve to have a safe environment in which to go to school and by weeding out those employees with criminal records we can better work towards accomplishing that goal.
It is clear that there is the potential for conflict when the Superintendent must gain approval for certain projects from the Board of Education. The Grand Jury believes that it is more than appropriate to re-consider the reporting structure and checks and balances that are currently in place to determine how greater focus can be placed on the successful education of our children.
DeKalb County Schools Board of Education
Board of Education Members in Attendance
Nancy Jester, Don McChesney, Sarah Copelin-Wood, Paul Womack, Jay Cunningham, Tom Bowen, Donna Edler, Pam Speaks, Gene Walker
On May 1,2012 The DeKalb County Schools Board of Education visited the Grand Jury. District Attorney Robert D. James also attended the meeting. The Grand Jury facilitated the discussion by asking the Board of Education (hereafter ‘the Board’) a variety of questions. A summary of the conversation and additional insights are as follows:
Mr. Walker opened the discussion by stating that the Board had inherited problems created by others, and that there was great financial strain put on the school system and Board. The Board expressed confidence in Dr. Atkinson’s abilities to re-organize the school system and make positive strides on several fronts, and the Grand Jury echoes this sentiment.
When asked to confirm the mission statement of the Board Mr. Walker responded: “To be the premier urban school system in the nation, preparing our students to be better citizens”. This is an admirable goal; however, the Grand Jury believes that the Board is not putting all of its effort and resources towards reaching this goal.
[Oh, Puh-leeze! Admirable, maybe. Over-reaching, absolutely. Incorrect, most definitely. Here’s the stated mission of DeKalb County School System: “To form a collaborative effort between home and school that maximizes students’ social and academic potential preparing them to compete in a global society.” The chair of the Board doesn’t know and cannot articulate the mission of DeKalb County School System?]
The Grand Jury asked each member of the Board if they would agree to a forensic audit of the entire school system, with the goal being to uncover any potential financial landmines, and to ensure that the proper checks and balances were in place.
Those Board members responding in favor of a forensic audit were: Nancy Jester, Don McChesney, Sarah Copelin-Wood, Paul Womack, Jay Cunningham, Tom Bowen, Donna Edler, and Pam Speaks. Those Board members responding against a forensic audit were: Gene Walker.
[Gene Walker, against. ‘Nuff said.]
Mr. Walker provided the Foreman of the Grand Jury with his reasoning in voting against a forensic audit when he stated that the audits completed by the State of Georgia did not uncover anything of concern.
[State of Georgia audits are NOT forensic audits. How can someone who served as chair of the DeKalb Development Authority and on the State Senate Banking and Financial Institutions Committee not know the difference between a regular audit and a forensic audit? A forensic audit is defined as, “The application of accounting methods to the tracking and collection of forensic evidence, usually for investigation and prosecution of criminal acts such as embezzlement or fraud.”]
During the discussion it was revealed that the Board had recently voted for a forensic audit, and that KPMG had been selected as the auditor. The Grand Jury asked what the scope of the audit would encompass and the Board had difficulty articulating any specific areas that would be the focal point or what the cost of the audit would be. The Grand Jury finds it troubling that the Board was unable to provide specifics of the audit; how did the Board vote to approve the audit without an understanding of the goals and scope of the project?
[See above …]
The school system and Board retain two law firms as outside counsel: Alexander and Associates and Sutherland, Asbill & Brennan. According to several Board members, total contractual legal expenses are of the magnitude of$1.5 – $1.7 million per year and there areseparate arrangements for what was referred to as “complex litigation.” No one on the Board was able to provide any clarity regarding the expenses associated with complex litigation.
[It is unlikely that $1.5 – $1.7 million per year is even close to being correct. We can’t know that, of course, because years of calling for transparency and an online check register has been met with a deaf ear.]
When asked why there were two firms handling the school system and Board’s legal needs there was no credible reason given. Sarah Copelin-Wood revealed that the Board wanted to have a minority-owned firm representing the schools and Board because “they understand the culture of the kids.”
[“The culture of the kids …” Hmmm – a great reason from the horse’s mouth for splitting DCSS into two school systems that can work more effectively with “the culture of the kids.” If we select lawyers on that basis, why not set up two independent school systems to work on that basis, as well?]
While ensuring there is diversity is an admirable goal, it should not be the primary reason for retaining the services of Alexander and Associates. The Grand Jury asked about the selection process used to select the Board’s outside counsel and Paul Womack responded that three board members rated and ranked all three potential firms to reach consensus. Mr. Womack, who is the Committee Chair for the Budget, Audit, Finance and Facilities Committee, was unable to recall the differences (if any) in the fees proposed by the bidding firms.
The third firm, Brock Clay, was not selected even though, according to testimony provided to this Grand Jury in another case, they submitted a bid which was more than $400,000 lower than the bid submitted by Sutherland, Asbill & Brennan. Brock Clay specializes in education law, and represents the school systems of Fulton, Cobb and Clayton counties in Georgia.
While the Board is entitled to exercise discretion in the selection of its legal counsel , the decisions made to retain two (2) firms while not selecting a highly qualified, and significantly less expensive firm when the school system is in financial distress are highly questionable.
When asked about the process used to review legal bills, the general response from the Board was that there is no process in place. To the Board’s knowledge there are no policies or procedures for what the law firms representing the school system and the Board can and cannot charge for (e.g., excessive conferences between attorneys, excessive legal research, copying charges, excessive number of attorneys participating in conference calls and meetings, etc.), or what is considered to be complex litigation. The Board should consider adopting formal guidelines for its outside counsel. As part of the proposed forensic audit referenced above, the Grand Jury urges the Board to ensure that payments made to attorneys be examined closely.
Policies and Procedures
Mr. Womack indicated that the work Dr. Atkinson is doing to re-organize the school system is “uncovering things all the time” that need to be addressed. A specific example Mr. Womack provided was the expenditure of approximately $450,000 in Title I Federal Funds to purchase text books without the approval of the Board. The Title I funds were set to expire and rather than not using them a decision was made by a staffer within the school system to procure supplemental text books. Mr. Walker indicated that this purchase did not violate the Board’s policies; however, Mr. Womack strenuously disagreed with Mr. Walker’s position. Mr. Bowen indicated that certain “emergency” expenditures could be made and then brought to the Board for approval after the fact. This would appear to put the school system at unnecessary risk of rogue or otherwise inappropriate activities from employees if policies are not followed.
[And this qualifies as an “emergency” how? Like the Board’s “emergency” called meetings? Multiple called meetings every month are simply a Board ploy to avoid videotaping, broadcast, streaming and stay out of the public eye.]
The Board was asked if they had approved the payment of $100,000 to Crawford Lewis’ legal defense as part of the Board’s Liability Protection for Employees and Board Members policy and all members responded affirmatively.
The policy explicitly states that it is intended to help defend “… civil, criminal, or quasi-criminal actions brought or maintained against members of the Board, the superintendents, principals, teachers, and other administrators and employees, where the Board determines that such actions have arisen out of the lawful performance of duties for the DeKalb County Board of Education.”
Also, the policy further states that liability coverage shall not apply to (among other things)“… any action based upon or attributable to any such person gaining in fact any personal profit or advantage to which they were not legally entitled.”
Further, the policy states, “provided further, that with respect to criminal or quasi-criminal actions, the Board may reimburse such persons for expenditures of the type described above if final judgment in such action is rendered in favor of such persons.”
To approve this payment for Mr. Lewis’ legal defense under this policy, the Board would have had to believe and determine that Mr. Lewis was lawfully performing his duties and that he did not gain personal profit. Mr. McChesney commented that the Board was unaware that Mr. Lewis was the target of any investigation from the District Attorney’s office. If he was not the target of a criminal investigation then why would the Board have funded his legal defense under the liability policy?
Based on the explicit provisions above it would appear that the Board’s payment of $100,000 to Alston & Bird to defend Crawford Lewis violated this policy. Mr. Bowen attempted to explain that the Board was advised by counsel to make the payment to sever all ties with Mr. Lewis; however, they were not required to do so. This is, at the least, another example of poor judgment by the Board and at worst a gross violation of policies where there is no oversight to the Board’s actions.
[The Board is playing fast and loose with our money – our tax dollars! It is all Monopoly™ money to them!]
Heery/Mitchell Legal Matters
The most alarming revelations that came from the Board were in regard to the Heery/Mitchell lawsuit and countersuit. Although the Grand Jury is not privy to all the facts and circumstances related to this case, it does note that it initially started as a breach of contract claim against Heery/Mitchell involving approximately $450,000. Following many years of litigation, this case has evolved into one involving more than $100 million in alleged damages and millions in legal fees. The Board claims that the legal proceedings have been delayed because the DeKalb County District Attorney’s office has not resolved the Crawford Lewis case. These are mutually exclusive events and the Grand Jury does not believe this is sufficient justification for a delay in resolving the Heery/ Mitchell situation, especially in light of the substantial legal fees incurred by the Board during this period.
[Who’s on first, What’s on second … but this is no laughing matter.]
Mr. Womack indicated that he was in possession of evidence showing $18 million or more in fraud, specifically related to false time sheets that were paid to Heery/Mitchell but that the District Attorney’s office would not evaluate the evidence. According to Deputy Chief Assistant District Attorney John Melvin, this evidence has never been offered to the District Attorney’s Office. The Grand Jury urges Mr. Womack to provide this information to the District Attorney’s Office immediately.
According to Mr. Womack, an audit of the Heery/Mitchell relationship was undertaken prior to filing the countersuit. When asked what the cost of the audit was, Mr. Womack was unable to recall the figure, although he estimated it to be over $1 million.
[And Womack chairs the Finance Committee! He has really got to go! The archives of this blog show that the actual cost was closer to $3.5 million.]
Quite shockingly, many Board members were unaware that this audit had ever taken place.
According to Mr. Bowen, the $110 million counter suit filed against Heery/Mitchell by the Board of Education was intended to pay the school system back for correcting errors made with schools that had been built, to build schools that Heery/Mitchell had committed to build but never broke ground and fraud committed by Heery/Mitchell.
If the Board had agreed to settle its claim that Heery/Mitchell owed the school system approximately $450,000 in contractual damages, the repair work and new buildings would have to be funded from within the school system’s budget. When asked what the actual cost of repairs and building would be Mr. Womack indicated that the total cost could be $180 million. It would appear that even a successful outcome of the countersuit would cause the Board to have an additional deficit of $70 million. The Grand Jury’s obvious concern is that the Board was advised to file a counter suit to fund the repair and build projects but the Board did not consider the totality of costs before agreeing to the claimed damages.
[Advised by whom?]
According to the Board, the suit does not request Heery/Mitchell to pay the Board’s attorney’s fees as part of the settlement, and at last count approximately $18 million had been paid to King & Spalding and an additional $19 million of fees was currently accrued. So even a successful judgment in this case would appear to create a deficit of approximately $107 million ($70 million in repair and building projects + $37 million in paid or accrued legal expenses).
[Perhaps the place to begin cuts and recoup losses caused by the Board is to eliminate Board salaries and the costly insurance that allows Board members to make million $$$ decisions with no concern over consequences. Any board member not interested in continuing as an uninsured, unpaid volunteer is welcome to step down — and don’t let the door hit you in the butt on your way out.]
When asked about the fee structure in place to have King & Spalding continue to prosecute this case, the Board appeared to be pleased with the contingency structure that had been agreed upon. When questioned about the economics of the case under this contingency agreement, Mr. Walker stated that this agreement would be renegotiated with King & Spalding once the case had settled. When asked if this intention had been agreed to in writing with King & Spalding, Mr. Walker responded that it had not been but that it would be a “good idea.”
[Completely fiscally irresponsible, if not downright stupid. It is NOT possible that Gene Walker was admitted to Duke University, much less was able to do the work to earn an actual Ph.D.]
This comment left the Grand Jury puzzled by why it had not previously occurred to the Board to enter into a written agreement memorializing this understanding (if there is in fact such an understanding) potentially involving hundreds of thousands of dollars in fees. Mr. Walker indicated that he and Mr. Bowen attended a mediation session with Heery/Mitchell in an attempt to settle the lawsuit. Mr. Walker indicated that a settlement was offered, however Mr. Walker was unwilling to provide any details because the discussions of the proposed settlement had been discussed in an Executive Session. The Grand Jury believes that the citizens of DeKalb County have the right to know what the proposed settlement was and the reasons for not reaching the settlement rather than proceeding down the path the Board is currently on.
The Grand Jury of the March-April 2012 term strenuously urges District Attorney Robert D. James to convene a Special Grand Jury to investigate the actions of the DeKalb County Board of Education. This reiterates the calls from past Grand Juries. The citizens of DeKalb County deserve to know that those responsible for the education of our children are, in fact, acting in their best interest and making the best use of public funds.
So, Robert James, do you still think the Board can “police themselves”? At the very least, this Board is so stupid they probably should not be allowed to cross the street by themselves. This stupidity is costing our children dearly.
When, exactly, Robert James, do you plan to start doing your job?