Update on Pottergate
I attended an event on Thursday by a group called First Thursday which is a black community group that supports its community businesses and groups. Their speaker was King County Prosecutor Dan Satterberg. I attended because it was advertised that he would speak about Pottergate.
I had hoped that some of the vendors named in both the Board investigation and audit would be there but no, unfortunately, it was under-attended. I would have liked to ask them some questions. (However, there had been 3 of them on the speakers list for the Board meeting but they were waitlisted and did not speak. They all had put down Small Business Works as their topic. That would have been interesting. One other speaker on the list did state that the district needs to do more to include black-owned businesses in their outreach.)
Initially, Mr. Satterberg was speaking on the John T. Williams shooting (the Native American woodcarver gunned down by a SPD officer).
The update on Pottergate is that Mr. Satterberg stated the following information:
I asked him to explain how he would make the case between an issue that belongs in civil court versus in the criminal courts. Meaning, the district had contracts with these vendors. It is not against the law to do poor quality work (except for safety issues). If the district felt that a vendor has not fulfilled their contract, that would be up to the district to sue them in civil court. (I personally feel that this won't happen as it would cost too much in legal fees to make it worth it.)
Mr. Satterberg agreed and said what would make it a criminal case is if both sides had conspired to created a contract based on little work or no work and yet get paid. Proving that might be very hard to do without witnesses or evidence (like e-mails). What is also troubling to me is that perhaps some of the vendors perceived that Silas didn't actually care a lot about the quality of work (but he cared about handing out a lot of contracts) and that the vendors may have thought "Easy money. I'm not going to do much here." But if there was no collusion, it is unlikely anyone could be criminally prosecuted.
Same for Fred Stephens. He may have been lousy in his oversight of Potter but unless there is evidence that he and Potter colluded to create a way to funnel money to these vendors for little or no work, there's no prosecuting Stephens.
That leave Potter holding the bag. He did do at least two illegal things (taking the district's money from the check from Tacoma public schools and trying to put it in his own account and misrepresenting himself as working for the district when he was working for himself). He did give the check back (under pressure) but I'm not sure that doing that legally gets him off the hook. At any rate, not a lot to charge him with doing.
*I suddenly realized that I need to go back and look at the audit report. I'm not sure anyone has done a forensic audit of the Small Business Works and accounted for where all the money went from 2008-2010. That's the timeframe when SBW morphed into the big spending monster it was. The spending went way up in those years and I wonder if all of it has been accounted for so that the district at least knows where it all went (at least on paper but maybe not in actuality).
I had hoped that some of the vendors named in both the Board investigation and audit would be there but no, unfortunately, it was under-attended. I would have liked to ask them some questions. (However, there had been 3 of them on the speakers list for the Board meeting but they were waitlisted and did not speak. They all had put down Small Business Works as their topic. That would have been interesting. One other speaker on the list did state that the district needs to do more to include black-owned businesses in their outreach.)
Initially, Mr. Satterberg was speaking on the John T. Williams shooting (the Native American woodcarver gunned down by a SPD officer).
The update on Pottergate is that Mr. Satterberg stated the following information:
- The Board came to him in December and asked for help. A SPD detective was assigned to the case.
- They have subpoenaed hundreds of records from banks in an effort to see exactly where money went*. After the meeting, one of Mr. Satterberg's aides told me that banks aren't exactly quick on these kinds of requests and that the forensic audit would be tedious.
- Mr. Satterberg stated he thought they might have some answers in 6 months.
I asked him to explain how he would make the case between an issue that belongs in civil court versus in the criminal courts. Meaning, the district had contracts with these vendors. It is not against the law to do poor quality work (except for safety issues). If the district felt that a vendor has not fulfilled their contract, that would be up to the district to sue them in civil court. (I personally feel that this won't happen as it would cost too much in legal fees to make it worth it.)
Mr. Satterberg agreed and said what would make it a criminal case is if both sides had conspired to created a contract based on little work or no work and yet get paid. Proving that might be very hard to do without witnesses or evidence (like e-mails). What is also troubling to me is that perhaps some of the vendors perceived that Silas didn't actually care a lot about the quality of work (but he cared about handing out a lot of contracts) and that the vendors may have thought "Easy money. I'm not going to do much here." But if there was no collusion, it is unlikely anyone could be criminally prosecuted.
Same for Fred Stephens. He may have been lousy in his oversight of Potter but unless there is evidence that he and Potter colluded to create a way to funnel money to these vendors for little or no work, there's no prosecuting Stephens.
That leave Potter holding the bag. He did do at least two illegal things (taking the district's money from the check from Tacoma public schools and trying to put it in his own account and misrepresenting himself as working for the district when he was working for himself). He did give the check back (under pressure) but I'm not sure that doing that legally gets him off the hook. At any rate, not a lot to charge him with doing.
*I suddenly realized that I need to go back and look at the audit report. I'm not sure anyone has done a forensic audit of the Small Business Works and accounted for where all the money went from 2008-2010. That's the timeframe when SBW morphed into the big spending monster it was. The spending went way up in those years and I wonder if all of it has been accounted for so that the district at least knows where it all went (at least on paper but maybe not in actuality).
Comments
Pottergate is just one reason of a host of reasons why a current forensic audit of the district is necessary. I have not met with Dr. Enfield, but my interests are a forensic audit of the district and a plan for southend schools. I hope that you join in a request for a forensic audit of the district
Audits have been the only method to assure transparency of the district's operations and finances.
The district needs to be held accountable and transparent. Public assets need to be protected.
BTW, use of the term "forensic" audit is misplaced. Does anyone really know WTH that means? Sure sounds good BUT. No, what we need is managers who actually know how to create streamlined, effective adminitrative departments that don't piss away money. Now.
It's a standard term in the field, as far as I can see.
Helen Schinske
I believe it is used with a specific goal in mind like "who spent what where and why?" Bernie Madoff got a forensic audit. I could see its purpose in the area of whether philanthropic grants paid for all the items some have suggested. It clearly looks backwards.
I have urged a new set of eyes look forward. Build a streamlined organization that uses our limited dollars efficaciously for educating our children. Enough time and money has been frittered away on reform and initiative du jour.
"BTW, use of the term "forensic" audit is misplaced. Does anyone really know WTH that means? Sure sounds good BUT."
Definitely misplaced and misused. Despite the Wikipedia definition - which, of course, relying on wikipedia for a definitive explanation is not a good practice.
One thing to remember or keep in mind for those that want a "comprehensive" forensic audit: Who is going to pay for it? This is not a snarky or smart-alec question. And, please no comparisons about how much it costs to do this or that. Just who is going to pay for it? Should a CPA firm do it pro-bono? Or should they charge the district $200-$300/hr and up (sounds like some of those Potter contractors)? Curious as to what y'all think.....
There is plenty of information about the field of forensic accounting:
1. What is Forensic Accounting ?
The integration of accounting, auditing and investigative skills yields the speciality known as Forensic Accounting.
"Forensic", according to the Webster's Dictionary means, "Belonging to, used in or suitable to courts of judicature or to public discussion and debate."
"Forensic Accounting", provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate and ultimately dispute resolution.
Forensic Accounting encompasses both Litigation Support and Investigative Accounting.
As Forensic Accountants, we utilize accounting, auditing and investigative skills when conducting an investigation. Equally critical is our ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting.
Forensic Accountants are trained to look beyond the numbers and deal with the business reality of the situation.
Other Terminology
Forensic Investigation
The utilization of specialized investigative skills in carrying out an inquiry conducted in such a manner that the outcome will have application to a court of law. A Forensic Investigation may be grounded in accounting, medicine, engineering or some other discipline.
Forensic Audit
An examination of evidence regarding an assertion to determine its correspondence to established criteria carried out in a manner suitable to the court. An example would be a Forensic Audit of sales records to determine the quantum of rent owing under a lease agreement, which is the subject of litigation.
Internal Audit
An audit performed by an employee who examines operational evidence to determine whether prescribed operating procedures have been followed.
External Audit
An audit performed by an auditor engaged in public practice leading to the expression of a professional opinion which lends credibility to the assertion under examination.
So, if you still haven't got a clue, try Google.
As to cost, the district should be seeking a foundation grant. Surely, this would be an interesting case of how a large urban district could be put on a firmer financial footing.
Remember the key is to be able to trace the money's movement through a given system. Of course, some folks don't want those answers.
As to cost, why not apply for a foundation grant? Surely Seattle Public Schools would be an interesting case for putting a large urban school district on firmer footing?
Of course, some folks really don't want to follow the money and find out where it leads.
I propose this is right up the alley of the Gates or Broad foundations. They're all about maximizing return on our educational dollars, I'm sure they're eager to follow the money from themselves, from SPS, the city, the feds and other money pots, to the Urban League, Strategies 360, the Alliance, and other contractors.
Helen Schinske
I'll be a little more specific, in a situation like the RSBDP debacle, the prosecutor's office (if they choose to file charges) will perform a forensic audit.
To call for one for the entire district, that's money mispent for dubious gain.
If Robert Boesche does anything, he must work at reconstructing each department, starting from zero. Cut the fat and the crap. Tell the leeches to go back to their think tanks. The district must undergo zero-based budgeting to get to 6% or LESS!
That I used the wrong term, geez, sorry.
As someone who read the reports, saw who got what; someone who knows the industry, public works in general, and minority contracting in specific; I guess I can say, yes, I know the facts. I'm not dismissive; I care about following the law and making the scofflaws pay a price.
Big picture, I also care about getting us the h*ll out of this mess. That's why I take the position of let's fix this now.
I don't mean to belittle anyone's ideas. I've just heard "forensic audit" alot and wanted to distinguish between it and the alternative.
Please google Roslyn School District; forensic audit.
It is interesting to see how a
$30K transaction at Home Depot led to a forensic audit. The forensic audit was extensive and detailed the manner in which the superintendent and others stole $11M from the district.
I agree with Dr. Wilda, a criminal investigation is limited.
What else, who else and to what extent were others involved with Silas Potter? What happened to the internal audito?
My understanding is a forensic audit (both operation and finance) give a thorough look at the manner in which money flows.
A forensic audit would provide an incoming superintendent a clear picture of district operations/ finances. Has anyone been able to figure out the bucket instructional coaches are paid? What else is there?a
Since Oleschefski, the district has sustained 2 major scandals; both which short change our children.
The costs of an audit may be huge, but what about future potential losses?
I'm not an expert but believe a forensic audit deserves conversation and thought.