By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
So guess how they did it really. An analysis of DISD expenditures between 1996 and 1998 found that, of $878 million in expenditures, $407 million were paid out through the use of so-called payment vouchers, circumventing the use of purchase orders and any review by the purchasing department. Payment vouchers were intended originally for petty-cash expenditures. They were not subject to review. But for years there was no upward limit at DISD on the amount for which a payment voucher could be issued.
The FBI has been provided lists of literally thousands of payment voucher transactions of suspicious nature. Whether any of those transactions was actually a criminal act is something the feds or somebody else will need to spell out.
Some of this is major money. The FBI has been shown transactions in which payment vouchers were used for expenditures of several million dollars each. Vouchers were used to hire lawyers, pay for construction, buy equipment, hire consultants, many things. The list of voucher transactions provided to the FBI included many dozens of payments to teacher credit unions, private investment firms, banks, literally hundreds of places where someone could have been stockpiling cash. These certainly could all have been entirely legitimate payments as well, but somebody needs to establish that fact before we all blow kisses and forgive and forget.
Another huge issue is the question of so-called phantom vendors to which DISD has been making payments of many millions of dollars a year. These are vendors for which the records show only a name and a post office box number. The accounts do not contain any of the information required by DISD's own rules for vendor identification. No Social Security, taxpayer identification, or telephone number. No representative's name. No information about who the vendor really is or why they are being paid.
Some of the people who have worked with this list have tried on their own to track down the P.O. boxes and have found that many of them are registered to other P.O. boxes. And those P.O. boxes are registered to still more P.O. boxes. Can you think of any reason why legitimate vendors to a school system would set themselves up that way?
The files given to the FBI include a list of some 5,000 check numbers for checks that were delivered to DISD headquarters but are simply missing from DISD's accounts. In addition, the files include hundreds of checks that were paid by DISD but that were drawn on departmental accounts that don't exist. The banks paid the checks, but the checks didn't reconcile when they came back to the district.
Nobody noticed, because for years DISD didn't reconcile any of its accounts. The banks did it for them. Some service, eh? I guess the banks wanted to hold on to those huge deposits. Apparently the banks reconciled against their own accounts, not the district's budget accounts.
Even though the district wasn't reconciling its own accounts at all, the FBI has been shown evidence and has been provided with names of bank employees who supposedly can confirm that the district used so-called "maintenance tapes" to go back into bank records and alter past transactions. The only bank employee I have talked to about this vigorously denied it was true, but the FBI's informant insists that it is true and that he has documentary proof.
In its story suggesting the corruption probe is over, the Morning News did report that a recent audit had found that more than a quarter of all DISD vendors are DISD employees, in violation of school policy. What the Morning News did not do was connect any of the dots: thousands of missing checks; a system set up with the banks in which account records can be fudged and re-fudged over the years; customary practice by which millions of dollars can be paid out of the building on an essentially unreviewed petty-cash voucher; hundreds of no-name blind-alley vendors set up deliberately to keep anybody from knowing who they are. A quarter of the known vendors are employees (nobody knows how many of the blind-alley vendors are employees, because no one knows who they are). It's a theft machine.
Here is an irony. Remember our last superintendent, who had to go to the pokey for fraudulently using school funds to buy $16,729 worth of Chinese furniture for her office? She must have been the only person in the administration building who didn't know about the payment voucher trick. Instead, her assistant, Freda Jinks, who later turned her in to the feds, had her use the purchase-order system. Gonzalez was bound to get caught that way.
So ding, dong, the Wicked Witch of the West is gone, but now what? Does this sound like a situation that can be solved through even the most powerful wishful thinking? It looks as if Coggins and the FBI are grinding away at it. It took years to create this mess. What better thing could the rest of us do than take a deep breath and tell ourselves, "OK, no Kansas anytime soon; maybe later." Of course, it would help, in the meantime, if they wouldn't sign up any new witches. Anyway, haven't we just about used up the four major directions by now?