DISD Doesn't Deserve to Win Its Bond Election Because of Its Fiscal Incompetence

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Professor Anderson and I did not discuss DISD in particular. In fact, I never even told him I was working on a story about DISD. He talked to me about audits in general.

He said a financial statement audit—the type we are talking about here—is not designed to hunt for fraud. "Ideally it would catch big-time management fraud," he said, "but it's certainly not going to pick up on smaller employee fraud unless by accident."

But he said really bad bookkeeping, turned up in any kind of audit, is usually an indicator of serious trouble: "The federal government was in terrible shape," he said. "It was decades and decades before the IRS could get a clean audit opinion.

"The Library of Congress was a great scandal. All these places for years and years had such poor records that they couldn't do [an audit]."

In either kind—a financial audit or a fraud audit—Urton said you can't come up with a verdict, good or bad, from an absence of information. "They can't draw any conclusions about that. They could say, 'Oh, yeah, they didn't find any fraud.' Well, big deal."

Even great big expensive fraud audits can be useless when they go up against a gigantic amorphous blob like DISD. In the late 1990s, the accounting firm KPMG Peat Marwick carried out a lengthy fraud audit of DISD in which they failed to come up with anything comprehensive. At the same time, Russell Fish, the computer inventor and public access activist about whom the Dallas Observer has written much ("Crazy Fish May Redefine Computer Industry," November 15, 2007), did his own amateur spot audit of DISD and found 5,000 paper checks totally unaccounted for, along with evidence of at least 100 "phantom vendors"—addresses to which the district was sending regular checks but which turned out to be anonymous post office boxes. Nothing ever came of any of that.

So now, in spite of a looming bond election and all kinds of pressure, they can't get Deloitte to give them a clean bill of health on the easier kind of audit, the financial one instead of a fraud audit. And Lowe says the news is good.

To be fair, Lowe doesn't say the news is great. He admits it could be better. But then he says what everybody tends to say: Even if the news about the books is lousy, we don't want to penalize the children by voting against the bond program.

I called Pedro Alvarez, a young political newcomer who is running for the school board against Adam Medrano in District 8 in my part of town. His literature, which I found on my doorknob, quotes him as saying, "The current Dallas ISD Trustee for District 8 voted in favor of putting the 2008 bond package up for approval by the taxpayers before the 2007 audit was complete and made public. This is irresponsible."

He said on the phone, "It's unfortunate that the district has jeopardized the bond program because they haven't proven that they can manage money." He said he resented the public appeal of bond program supporters who say voting against the bond program will hurt the kids.

"Now we have guilt and obligation to vote yes for the bond, instead of saying, 'Yes, we happily will.'"

But he's going to vote for it. He says voting against the bond would hurt the kids.

I also spoke to Medrano, the incumbent in District 8, who said the bond program is needed no matter what happens with the audit.

I don't agree. I think there has to be a penalty somewhere, sometime. Another person I touched base with last week was Sherri Brokaw, the former DISD employee whom superintendent Michael Hinojosa cynically scapegoated for the district's credit-card scandal in September 2007. In that case DISD officials lied to the public about an internal proceeding that had called for Brokaw's reinstatement.

Brokaw told me last week she sees the school board and district officials pushing guilt off on parents and taxpayers about this bond election the same way they tried to put it on her: "Aren't they making us all their scapegoats now?"

I agree. They'll say anything. They will do anything. They just want to keep that juice flowing. The money is the one thing they care about and the one thing they understand.

The only way to kill the funny money culture at DISD is to cut off the money. I'm going to vote against the bond program, precisely because I do care about the kids. You do what you want.

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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze