$1.3 million more might be misspent in Seattle schools scandal

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by MIMI JUNG / KING 5 News

Bio | Email | Follow: @MimiJungKING5

KING5.com

Posted on September 17, 2012 at 10:32 AM

Updated Monday, Sep 17 at 7:05 PM

A new state audit reveals the Seattle School District misused even more money that first thought and could total as much as $3 million.
 
A second investigation by the State Auditor’s Office looked into the district’s small construction contracts prior to 2009 after it became apparent there may have been issues with the district’s small business program, which was supposed to help small businesses win government contracts.
 
It discovered that between September 2005 and August 2009, the district incurred unnecessary costs of approximately $1.3 million due to lack of controls and supporting documentation.
The first investigation  revealed $1.8 in suspicious spending or wasted money.

Silas Potter, who oversaw the program, now faces charges of first-degree theft in what prosecutors described as a scheme to bilk the district out of money.   Potter has since been fired, along with Superintendent Maria Goodloe-Johnson and the district’s top financial official.

State auditors looked at 26 vendors and found the district overpaid 14 of them.  In one case, the district paid $2500 for two high resolution infrared security cameras for Cleveland High School, but they were never installed.  

In another case, the district paid a vendor $14,000 for video surveillance cabling and conduit that auditors determine was worth only $1000.  In a number of situations, the markup on labor was excessive.

Sherry Carr, school board member and chair of the board’s audit and finance committee, says it’s disappointing and an outrage.
 
“We did not, in the past, have tight financial controls, and we did not have strong oversight measures in place as a board. I believe both of those things have been addressed,” said Carr.

Over the last 18 months, the district says it has made a number of changes that provide greater oversight.  It has established a new ethics program and hired two additional internal auditors.
 
"I will say to you at this point, the risk for anyone thinking that they are going to steal money from Seattle Public Schools, the risk to them has gone up and the risk of that happening has gone down," said Carr.

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