GPS Fraud, Waste & Abuse Report #2: Red Flags of Fraud in Employee Travel

Employee travel in Gilbert Public Schools appears to be a massive six figure expenditure every year. We say “appears to be,” because tracking all the GPS employee travel is pretty much impossible … by design. The biggest clue that this mismanagement and abuse of public funds is intentional is that other public school districts in Arizona formally approve all employee travel in public meetings. Other districts also predict and then track all expenditures for individual trips, as well as annual costs for all travel. GPS hides those expenses in a multitude of line items on the monthly GPS Voucher Reports. 

The GPS governing board historically has been remarkably incurious about massive expenditures of public money for travel by GPS employees. This is an indicator of potential fraud on its own, because the board president for several different years was Lily Tram, the Director of Financial Services at Arizona State University, who deals with both accounts payable and travel for an even larger public entity.

Lily Tram also was on the board while this was happening in GPS:

GPS budgeted $28,782.59, but spent $186,911 for conferences and training FOR ADMINISTRATORS … Additional costs for ADMINISTRATORS to attend the trainings and conferences listed above [in the linked blog post]: GPS budgeted $30,500 but spent $161,643.

Tram originally boasted of her financial expertise when she ran for election to the board in 2008 and most recently in her official 2016 campaign statement:

My work experience includes over 27 years in accounting and budgeting in higher education. This background gives me an ability to weigh fiscal responsibility and budgetary constraints, alongside the needs of our students and their education.

Tram resisted oversight of the GPS administration, especially in regard to finances. That’s diametrically opposed to Tram’s work at ASU. As board clerk, Jill Humpherys played a key role in blocking inquiries about GPS expenditures; board member Charles Santa Cruz apparently couldn’t be bothered to even look at questionable spending.That creates an environment in which fraudulent schemes can proliferate.

Red flags of fraud fly high on travel by GPS employees because there is a question as to whether the GPS Governing Board has the authority to pay for membership in any national organization, the hosts of these boondoggles in exotic resort locations. Relevant Arizona state law addresses only paying for membership (not including attending conferences) in state-wide organizations. See AZ AG Opinion I00-022: “The only mention of membership dues in the statutes governing schools is the authorization for districts to pay dues “for membership in an association of school districts within this state.”  A.R.S. § 15-342(8).” In the travel noted below, GPS paid for memberships of several employees in national organizations in addition to paying for expenses of the their travel to network.

Keyboard: Maybe someone can explain why *networking* is a valid reason to pay thousands upon thousands of dollars for GPS employee travel. Maybe the board should meet behind closed doors to discuss this matter.
Westie: Oh, I get it, you mean another executive session to discuss the superintendent’s performance!

Worse, Kishimoto’s improper travel payments and reimbursements appear fraudulent. Here’s how one category of travel morphed into what appears to be a scam. When Kishimoto first became superintendent, she reported to the governing board on July 11, 2014 that the Association of Latino Administrators and Superintendents, ALAS, was paying her hotel and flight expenses because she was an ALAS board member. Kishimoto alluded to some private agreement with GPS board members reached during her “selection process” as GPS superintendent. Christina Kishimoto remained on the ALAS board, in fact she was president the next year, through 2016. You would think ALAS would cover her travel expenses during that time. You would be wrong. GPS paid through the nose.

Kishimoto reported another trip to the GPS governing board on September 19, 2014, making no mention of who would pay her expenses for the ALAS event. Public records show that GPS reimbursed Kishimoto for this conference; apparently with a GPS issued check to Kishimoto for $1,576.92.

Vouchers 5063-5078, paid through November 6, 2014, show a $2,060.92 travel reimbursement to Christina Kishimoto. Westie filed a public records request for the reimbursement records. Lo and behold, GPS did not produce records for a $545.40 blanket purchase order within the request, although other documentation for the voucher line item was produced.

This reimbursement raises a red flag of fraud on its own: the same airline expense and an almost the same hotel expense had been reimbursed to Kishimoto on the previous voucher, three weeks earlier, with no indication of the purpose for the travel. It is significant that Kishimoto made her own travel arrangements and submitted for reimbursements rather than use the district’s contracted travel agency. GPS paid different amounts directly to Kishimoto on a different voucher report: $962.20 for airline tickets and $524.70 for hotel expenses (Vouchers 5040-5062-Sep-Oct 2014, paid through October 16, 2014). 

Kishimoto informed the GPS Governing Board on October 9, 2015 that she would be attending an ALAS conference in Albuquerque, New Mexico in October 2015. Kishimoto pointedly did not request the board’s approval. It would have been futile to request board approval in accordance with A.R.S §15-342(5), because there was no board meeting scheduled between Kishimoto’s board brief and the dates of her travel, even though this travel had been arranged and expensed to the district months earlier, in July or August 2015.

Following the ALAS conference, Kishimoto reported to the board on October 23, 2015 that she had taken a “team” along with her to the ALAS conference. Some of the travel expenditures for GPS employees to the October 2015 ALAS conference were spread out over several months’ worth of vouchers. Some expenses don’t give an employee name.

Kishimoto again made her own arrangements rather than use the travel agency that has a vendor contract with the district. As a result, Kishimoto’s self-purchased airline tickets ($522.00) were far more expensive than Steve Smith’s airline tickets ($236.01) that were procured through the GPS travel agency on the October 2015 vouchers. Kishimoto posted on her Twitter account that GPS Principal Sam Valles presented at the conference, but Westie hasn’t found expenditures or reimbursements reported for Sam Valles for the October 2015 ALAS conference.

Fees and expenses for the ALAS conference varied greatly. GPS paid conference fees for Steve Smith ($450.00), who was Executive Director of Technology at the time, and significantly more for GPS Principal Mike De La Torre ($595.00). Airline tickets for Mike De La Torre were purchased through the district’s vendor, Sinclair Travel. GPS also paid for Christina Kishimoto’s registration fee ($450.00) as well as her “dues and fees” ($350.00) for membership in the national organization.

Key in on the name Steve Smith, aka Charles Stevin Smith: did you notice that in months just after Christina Kishimoto’s divorce became final, she was traveling with the same subordinate with whom she had been reported to have an *alleged* inappropriate relationship? As vouchers show, Steve Smith’s attendance at the ALAS conference was planned early. Christina Kishimoto’s attendance was arranged at the same time, in the July-August 2015 timeframe. A motive for spreading expense payments and reimbursements over several months would have the effect of concealing Christina Kishimoto’s and Steve Smith’s alleged inappropriate relationship and travel together after Christina Kishimoto’s divorce in July 2015.

Steve Smith also traveled to a Arizona Association of School Business Officials event in Tucson at the same time of Kishimoto’s travels, although Steve Smith was not in a school business position in GPS.  Steve Smith was reimbursed for travel expenses to the AASBO Conference Tucson, AZ  July 17-18, 2015 (July-August 2015 Vouchers). Steve Smith’s mileage, meals and hotel amounted to $264.14. Christina Kishimoto’s expenses were $247.42 (Vouchers 5254-5285,  June 2015).

None of this travel was approved by the GPS governing board in accordance with A.R.S 15-342(5)GPS didn’t have an internal auditor at the time; the board clerk was charged with reviewing expenditures for the board. With reimbursements to various GPS employees spread out over several months, and no board approval before those employees attended the conference, oversight was all but impossible.

Here’s an example of how a school district governing board in Arizona SHOULD go about authorizing out of state travel: 

Out of state travel – Cartwright School District April 2015 – Approval of Out of State Travel for Superintendent and Governing Board to attend the National Association of Latino Elected Officials 32nd Annual Conference in Las Vegas, NV, June 17-19, 2015 (see page 6, item #7)

It appears that Lily Tram provided cover for any suspected fraudulent activities by refusing to accept complaints about the superintendent unless a citizen filed a Notice of Claim against the district. GPS doesn’t have an Inspector General, or even a conduit for whistle blower complaints. But Arizona State University does!

The Fine Print: Westie’s Fraud, Waste & Abuse Reports chronicle deliberate misuse of authority and public funds, abuse of authority, gifts of public funds and intentional violations of Arizona statutes and administrative rules by Gilbert Public Schools top-level administrators at the behest of superintendent Christina Kishimoto. Word of warning to those who might consider the business-as-usual tricks employed by GPS admins in the past: it won’t help to lose files, forge signatures or *create documentation* after the fact. Everything in the FW&A Reports has already been reported to state and federal elected officials and enforcement agencies.

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