Friday, August 27, 2010

KTOK: Preliminary Audit Alleges Long List Of Violations By Broken Arrow School District

By Jerry Bohnen/NewsRadio 1000 KTOK ~ A preliminary state audit of the Broken Arrow School District, obtained by KTOK News, alleges millions in payments made in violation of state laws, 3 days of paper shredding by one school administrator to eliminate documents, and a possible cover-up by some school board members and administrators.

The audit was at the center of a recent shouting match between State Representative Mike Reynolds and State Auditor and Inspector Steve Burrage. Reynolds had accused Burrage of intentionally delaying a release of the audit. Burrage denied it.

The nearly 70-pages of the early audit, one that was written months ago, is a stunning list of dozens of allegations of violations of public competitive bidding laws, split bidding by the Broken Arrow school district, the awarding without bids of millions in contracts with a Broken Arrow air conditioning firm named Air Assurance, the installation of used air and heating equipment at the Broken Arrow schools and a violation of the State's open meeting act by the board of education.

No Competitive Bidding
The initial audit claims the school district violated the public competitive bidding act and over a 15-year period awarded millions to Air Assurance of Broken Arrow, a firm that is (an out-of-state) company. The audit alleged that in one six year period, from 2003 until May of 2008, the school district paid the company more than $3.1 million for repairs, replacement and preventive maintenance to the school system's HVAC, or heating, ventilating and air conditioning system. And the audit alleges that in many cases, the work was carried out before being approved by school district administrators. Air Assurance, managed by Mike and Narissa Rampey, who once owned it but sold it to an out-of-state company, had such easy access to the school system that workers had building keys to come and go as they pleased.

Names Named in Audit
The audit alleges former Assistant Superintendent of Operations Dr. Gary Gerber, who in 2008 was named the interim-School District Superintendent and Bill Miller, the school system's Director of Maintenance were in direct control of the building fund budget and operations during the time of the alleged violations. The audit was partially the result of allegations raised by former Superintendent Jim Sisney who was fired by the board of education in a split vote in October of 2008.

The documents revealed numerous instances of annual payments to Air Assurance in which no sealed bids, no written contracts or proof of insurance by the contractor were found. For instance, in 2007, Air Assurance received $641,965.13 without any sealed bids, written contracts or proof of insurance. In the 2006-07 school year, said the audit, "the maintenance department hired Air Assurance to replace all HVAC units without getting competitive quotes or bids from other HVAC companies."

Split Contracts
The state audit also documented instances of splitting contracts so the district would not have to seek public bids for the work. In the case of the 2006-07 school year, the cost of more than $25,000 in HVAC unit replacements was split. The audit cited the same instance in 2004-05 when the cost of HVAC unit replacement on a gym totaled $29,409.14 and the purchase orders were split. As the audit noted, there is a state law against "splitting of contracts" and it is considered to be a misdemeanor punishable by imprisonment of up to a year in the county jail and a fine of $1,000.

Paper Shredding
The matter of paper shredding and the destruction of documents at the center of the investigation was raised by the audit. The document claimed it occurred when former Assistant Superintendent Gary Gerber was named interim Superintendent replacing Jim Sisney. The audit states that on November 3, 2008, Gerber requested a school employee to order a shredder for him.

"One to go over a can...not expensive," Gerber reportedly told the woman. The shredder was received the next morning. "Carol Yates said for at least three days non-stop from 7:30 in the morning until 5 in the afternoon, Gerber closed his office door and shredded documents," stated the audit. Another employee observed Gerber coming from his office that month and was "carrying two clear bags that contained shredded documents." Another employee stated "that at least on five occasions from October 2008 to December 2008, he observed Gary Gerber's personal vehicle while it was parked at the school--he saw a clear bag of shredded paper."

The audit also stated that after Gerber was appointed interim superintendent, "he locked all employees out of the office where HVAC records were contained."

The audit also explored how the school board, when former Superintendent Jim Sisney started questioning expenditures to Air Assurance, dumped one law firm and hired the Tulsa firm of Rosentein, Fist & Ringold. The document alleges that from August 13, 2008 until June 30, 2009, the firm billed the district for $166,597.91 in legal fees. One RFR lawyer billed the district at the rate of $250 per hour. Three of the firm's attorneys were present last week when the first exit interview was held by the State Auditor and Inspector's office. The lawyers, according to one source, were trying to pressure state officials to modify the audit and make changes.

The law firm is one of Oklahoma's oldest. It was created in 1920 and since 1932, has specialized in education law. RFR handles legal representation for a majority of the state's nearly 540 school districts. Its current web site states that it represents 350 public school districts, private schools, career tech centers and one college. It also specializes in grant development and writing services and helped the Jenks school district in 2009 receive a $1 million grant for a Foreign Language Assistance program. RFR has 18 attorneys on staff and one of them, Karen Long, was named last year by State House speaker Chris Benge to the Oklahoma Ethics Commission.

The audit makes it clear that the Oklahoma State Bureau of Investigation is looking into the lengthy list of possible criminal violations. But other sources indicate the Federal Bureau of Investigation might also be looking into the allegations.

The audit, as stated by officials at the State Auditor and Inspector's office last week is to be released in full sometime next Tuesday or Wednesday at the conclusion of the exit interviews with the Broken Arrow school officials. But there are also reports in recent days that the Auditor might attempt to turn the case into an investigative audit and put it in the hands of the Attorney General, a move that might seal the audit from the eyes of the public.

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