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Published: Monday, September 17, 2012, 12:17 p.m.

Seattle schools scandal may be worse than thought

SEATTLE -- Last year's Seattle Public Schools financial scandal may have cost $1.3 million more than previously thought.
According to the state auditor's office, Silas Potter Jr. approved gross overpayments during the four years he headed a district program to award small public works contracts, and total misspending could approach $3 million.
In some cases, payments Potter approved appeared to be 10 times what they should have been, such as when the school district paid $14,500 for video surveillance cabling and conduit worth just over $1,000, The Seattle Times reported.
Potter faces first-degree theft charges, as do two others accused of conspiring with him.
The scandal, which came to light last year, prompted the firing of Superintendent Maria Goodloe-Johnson and the district's top financial officer. It also likely factored in the defeat of two school board members last fall.
In an earlier investigation, the auditor's office identified $280,000 in losses and questioned another $1.5 million in expenditures for a period when Potter headed a now-closed district office that was supposed to help small businesses win government contracts.
The latest audit covers the district's small-works program, which awards public works contracts that cost $300,000 or less. Potter oversaw that program from 2005 through 2009. The audit found problems with 14 of the 26 vendors the office dealt with, including wages paid at much higher than the prevailing rate, lack of detail about what the district was paying for, charges for hours that vendors could not document, and excessive markups.
Duggan Harman, assistant superintendent of business and finance, said the district might ban some or all of the 14 vendors from bidding for future district work, and none of the 14 has had a contract since 2009. District officials also have been looking into whether they can recoup any of the money.
Harman acknowledged that the district failed in a number of ways, such as failing to oversee employees, follow normal accountability channels and maintain an "adequate means for employees to raise their concerns."
"It kills me to see this," Harman said. "I'm trying to keep in perspective that this was something that was seven years ago."
The district has fixed many of the problems and now requires more than one person to sign off on any purchase orders or invoices, no matter the amount, Harman said. Invoices must be detailed, he said, and can no longer say "payment per agreement."
The district also has established a new ethics program, beefed up board oversight of district finances, and hired two additional internal auditors.
Story tags » Education & SchoolsSeattle

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