GPS Fraud, Waste & Abuse Report #5: Accountability for Fraudulent Schemes

Fraud, Waste & Abuse in Gilbert Public SchoolsFor the past three years, Christina Kishimoto’s GPS superintendency has been marked by willful ignorance and intentional blindness in terms of oversight. One reason Westie is presenting this series of Fraud, Waste & Abuse reports is so the public will know what historically has been hidden from view in Gilbert Public Schools. Another reason is that these posts are transmitted to individual GPS board members, making a public record, which increases the difficulty for GPS top-level administrators to collude in concocting a Get Out of Jail Free card. It’s time to bring information into the sunlight for public scrutiny, and to hold perpetrators of fraudulent schemes accountable. 

Members of the GPS governing board will be making severe cuts to GPS educational programs in coming months. Before making a public spectacle of hypocrisy with budget cuts, perhaps they will decide to examine and end wasteful expenditures by a superintendent who seems to flout laws just because she can. Actually, the two remaining members of the former Rubber Stamp board will most likely be searching for some CYA assistance, since they’re in so deep, as these FW&A reports show.

There has been no functional process for reporting FW&A internally. The GPS governing board refused to accept complaints about the superintendent during Lily Tram’s tenure as president of the board. When voices were heard, GPS typically assigned a pet attorney paid by The Trust to get rid of the problem via a CYA report cloaked in attorney-client privilege. How many times during Christina Kishimoto’s tenure has the “Internal Auditor” position been eliminated? [rhetorical question] In her January 27, 2017 Board Brief, Christina Kishimoto made short shrift of a short-term incumbent by promoting Patricia Donohue to a director position in Business Services. Note that Patricia Donohue is a Certified Public Accountant; that means she has a CPA license to protect, so it made perfect sense that Christina Kishimoto wanted the Internal Auditor position vacant again!

There might be some light at the end of the Fraud, Waste & Abuse tunnel: in the GPS Uniform System of Financial Records Compliance Questionnaire For Fiscal Year Ended June 30, 2015, there is this nugget about FW&A allegations:

For Governing Board/Management Procedures question 4, the audit firm should confirm management’s appropriate action to resolve all allegations of theft, fraud, or misuse of district monies or assets by either examining copies of the incident reports or communicating with the agency involved in investigating the allegation.

*  If the audit firm determines that district management was aware of allegations but did not appropriately resolve them in a timely manner (e.g., no action was taken, actions were not documented, actions were delayed, inadequate, or inappropriate to the circumstances), the audit firm should answer the question “No.” This includes instances where an external investigation is underway for allegations, but district management did not request the investigation, was not fully cooperating with the investigators, or was not otherwise attempting to resolve the allegations.

*  If the audit firm determines that district management was not aware of any allegations (based on inquiry, review of Governing Board minutes, search of local media coverage, and results of audit test work), the question should be answered “N/A.”

*  If the audit firm finds evidence of theft, fraud, or misuse of district assets but does not find evidence that district management was aware of the possible theft, fraud, or misuse, the audit firm should appropriately investigate and report the theft, fraud, or misuse to the Office of the Auditor General, but this question would be answered “N/A.”

* A “Yes” answer indicates that the audit firm has determined that the District is in compliance with the USFR on that question and a “No” answer indicates the District does not comply. However, the final determination of compliance on each question, as well as overall compliance with the USFR, is made by the Office of the Auditor General based on the evidence presented in the questionnaire, audit reports, the audit documentation, and any other sources of information available.

That’s the kind of research that sparked Westie’s FW&A Reports, along with a professional lifetime of adhering to the highest standards of conduct in protecting the public trust: careers in the U.S. Air Force. Our top leaders put it bluntly to youngsters: USAF members could be forgiven for almost anything other than messing with Uncle Sam’s money. A favorite admonition, often related to lethargy for paperwork completion: “If it feels like a shortcut, DON’T DO IT.” We had strict enforcement of ethics standards under Inspectors General, which position also exists in every federal agency. They’re independent and powerful.

Westie has long advocated for the GPS governing board to hire their own Inspector General who would answer ONLY to the board. Now that the one-year-only Chief of Staff position is being vacated after three years (another Kishimoto hoodwink), maybe the board will reconsider the suggestion. Or set up a Citizen Audit Committee that answers only to the board. There are many ways to skin this cat, but doing so will require an act of political will on the part of at least three members of the governing board to implement a solution:

Stop School District Fraud: A Simple Solution.  Many school districts still lack necessary and fundamental oversight of their financial operations. School leaders often forego an indispensable resource designed to protect their reputations and reduce the risk that their district’s malfeasance will dominate local media reports and newspaper headlines. The solution is an internal watchdog like an inspector general or internal auditor. Legal bills, compliance with law enforcement investigations, civil recovery actions, even qui tam claims can drain resources and distract district administration and staff from their core function.  Having systems in place designed to identify high-risk areas, ensure effective controls are in place and, if necessary, respond when controls are circumvented, sets the tone that misconduct will not be tolerated and will be swiftly detected and punished.

In these FW&A Reports, we’ll see that GPS is involved up to its eyeballs in many of the examples of fraud listed in a presentation titled, “Fraud: How to Get Your District Free Publicity.” We all know how Christina Kishimoto craves publicity as she quests for her *national reputation.*

Government and public administration is in the top three most victimized industries for fraud.  Regular audits are not designed to detect fraud – they are to render an opinion on the District’s financial statements. Disbursement schemes are the most common; travel and expense reimbursements also are a common target for such fraud.

• Fictitious vendor or invoice schemes
• Consulting invoices
• Mischaracterized expense reimbursements
• Overstated expense reimbursements
• Fictitious expense reimbursements
• Multiple reimbursements
• Lack of cash receipts or inventory records (Catering events)

The Arizona Attorney General made the case for GPS governing board members to discharge their responsibilities to the public that elected them:

School districts are legislative creations, and school boards must exercise authority within the limits established by statute. Tucson Unified Sch. Dist. No. 1 v. Tucson Educ. Ass’n, 155 Ariz. 441, 442-43, 747 P.2d 602, 603-04 (App. 1987). In addition, the Arizona Supreme Court has held that school districts owe trust obligations to the public.

School districts are created by the state for the sole purpose of promoting the education of the youth of the state. All their powers are given them and all the property which they own is held by them in trust for the same purpose, and any contract of any nature which they may enter into, which shows on its face that it is not meant for the educational advancement of the youth of the district but for some other purpose, no matter how worthy in its nature, is ultra vires and void.
Prescott Community Hosp. Comm’n v. Prescott Sch. Dist. No. 1, 57 Ariz. 492, 494, 115 P.2d 160, 161 (1941)

Westie has repeated endlessly regarding Gilbert Public Schools: Follow the Law!

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. Public trust can be restored only through an impartial forensic audit by someone who doesn’t have a stake in these matters. We suggest a forensic audit include travel and other *reimbursements* to GPS employees, federal funds and grants to schools, and payments to friendly GPS vendors for myriad purposes. There’s fire behind all that smoke!

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