The Dress Rehearsal for the GPS 2014 Great Giveaway of Tax Dollars

We’re intrigued with the *gifts* of public money that Gilbert Public Schools gave to more than 100 individual vendors who have the same name as GPS administrators. The deeper we look, the murkier the waters. BLUF (Bottom Line Up Front): someone’s been caught with their hands in the public cookie jar. Let’s connect the dots and see who that might be.

We posted about the *gifts* and named the names previously. In the grand scheme of things, $350.00 is a big deal when it gets multiplied by 100, and suddenly we’re talking about $35,000.00. That’s not to say that just about any GPS employee is more deserving than high-paid administrators of this *gift* at the end of the fiscal year (which case is easy to make) or that there is a wide chasm of income inequity in GPS (darn tootin!). There’s quite a history of GPS GOBs rewarding their pals on the public dime, but we digress.

We believe GPS should have used that $35,000.00 to give bus drivers a raise: drivers often are the first and last GPS employees a student sees every day. Add in the fact that GPS is facing a shortage of bus drivers, making the first days of school chaotic (again, happens every year). We’ll explore what line items could have been funded in a later post – we’ll look for line items that directly impact the classroom. In the meantime, the decision to give *gifts* to administrators shows what priorities really are in the Great White Temple  of Doom. For now, let’s focus on the legality and past practices and what we caught the Good Old Boys doing in the 2014 Great Giveaway of Tax Dollars.

We had recently learned about GPS GOBs using the vendor system to skirt the law and district policy, which gives us a whole lot of dots to connect in regard to the Great Giveaway. Just last spring, some of the GOBs in the Great White Temple of Doom wanted to support some kind of student activity that would require hiring lifeguards. Their first instinct was to dip into petty cash funds at the schools involved to pay said lifeguards. Petty cash funds are not allowed in GPS, but that technicality only slowed down this process. Next, the GOBs decided to make the lifeguards *vendors* and pay them that way. Ooopsie! The GOBs ran into more problems. When you read the attached email thread, start at the bottom and work your way up to keep the chronology straight.

First query to Business Services about making the lifeguards vendors:

We’d like to use these people as lifeguards for an upcoming jr high student council event. Can you please let me know if there’s anything else they need to submit, and would it be possible to let me know when they become vendors so we can do requisitions?

No, no, no, says BS: a couple of problems exist. To be paid hourly, they have to go through HR and submit forms for Pay for Additional Work. But they’re not *employees.* BTW, the district doesn’t have a bid for lifeguard services. Oh, lookie here … the new *vendors* were children of employees! What a nice way to give a kid an allowance without dipping into Dad’s wallet!

I received the vendor registrations forms for ****, ****, & ****, along with the conflict of interest forms to use their services as lifeguards. However per Crystal since they would be paid hourly they would need to go through HR to put in for PAWs instead. If we are looking to pay them as individual vendors through the PO process it would create a conflict since they are children of employees and we would have to procure their services through a sealed bid. Currently we do not have a bid for lifeguard services.

So they wanted to use petty cash, but someone wasn’t playing well with others (perhaps because schools are not allowed to keep petty cash hanging around?):

Everyone except **** could come up with petty cash, right?  How about we all pitch in an extra $6 for a total of $36, then ****’s part will be covered, the kids will get paid, and life will remain simple.

Okay, sure, they could just pass the hat and pay cash. What could go wrong?

If we go this route, please remember, you must  have minutes showing that a StuCo  meeting was held to approve paying for the lifeguards utilizing StuCo funds. Each school must also prepare a receipt/invoice of some type to show the payment was given/received to lifeguards.

Something did go wrong. Someone pulled the plug on this scheme:

We are not permitted to pay the lifeguards cash for working the event, so we are back to square one.

We were interested in what was going on when we saw the word *vendor* as we reviewed records. You never know what you’ll find! In this case, it’s clear that GOBs were accustomed to skirting laws and policies and such to achieve their goals. That’s why we knew we had the goods on the GOB scheme to give gifts of $35,000.00 in public money to select GPS administrators rather than spend that money on students.

It turns out that giving *gifts* of public funds in violation of the Arizona Constitution is not the only problem the GOBs have in this case (and probably many other cases). Arizona has strict conflict of interest laws governing government employees as well as elected officials. If you want to give the GOBs another get out of jail free pass (Hey Jill, Hi Lily) because “we all make mistakes,” the Attorney General and lots of judges will jump on you like a duck on a June bug. Anyway, the GOBs knew all about these laws and prohibitions, but they were so accustomed to having their way, they just blundered along and fell into trouble.

Let’s look at district policy GBEEA, Business Relations:

No employee shall supply any equipment, material, supplies or services to the District unless the District has issued an award of contract as a result of public competitive bidding, regardless of funding source or dollar amount involved.

This policy reflects state law, which is really, really strict about conflicts of interest for a government employee, which is something the Arizona Attorney General really, really cares about:

Arizona’s conflict of interest laws serve to prevent self dealing by public officials. Maucher v. City of Eloy, 145 Ariz. 335, 338, 701 P.2d 593, 596 (App. 1985). Should a public officer or employee wish to supply goods or services to his or her agency, the contract must be awarded pursuant to public competitive bidding. A.R.S. § 38-503(C) requires school districts to follow public competitive bidding procedures for all procurements between school districts and their employees, however, regardless of the dollar amount involved and regardless of the source of the funds. Arizona’s conflict of interest statutes are broadly construed in favor of the public, and the Legislature has provided substantial civil and criminal penalties for failure to comply with the statutory mandates.

 It’s pretty easy for any citizen to determine if what GPS GOBs have done in this cute little giveaway is legitimate:

Every political subdivision and public agency subject to A.R.S. §§ 38-501 to -511 must “maintain for public inspection in a special file all documents necessary to memorialize all disclosures of substantial interest made known pursuant to this article.” A.R.S. § 38-509. Any public officer or employee who has a conflict of interest in any agency decision or in the award of a contract must provide written disclosure of that interest in the agency’s special conflict of interest file.

A reasonable person could conclude there is no way this situation was an innocent giveaway of public funds. We doubt these individual administrators asked for $350.00 from the public purse. Did you know there’s a district policy about fringe benefits? Yeppers, the policy requires board approval DURING THE BUDGET PROCESS. Oh snap, there goes another defense the GOBs wish they could use!

However, it’s important to note that the giveaway of public funds was an intentional act that occurred at the end of the fiscal year, which should have raised red flags of fraud.  Snap, GPS doesn’t have an Internal Auditor any more (you know, the employee who is supposed to keep GPS honest). Isn’t it nice that there *just happened to be* funds available for this GOB giveaway? So what can a reasonable person do? As it turns out, there’s a law for that, too!

Private Citizen Suits. Any person who is affected by a public agency’s decision made in violation of the conflict of interest laws may sue to have the contract or decision declared null and void. A.R.S. § 38-506(B). The court may award costs and attorney’s fees to the prevailing party. A.R.S. § 38-506(C). Persons claiming that a public officer, employee, or board member had a pecuniary interest in making a decision against them may also file suit in state or federal court alleging a violation of their civil rights pursuant to 42 U.S.C. § 1983.

Isn’t it nice that the Arizona Attorney General’s office has been so busy lately with investigations into improper use of funds in the Chandler school district?  They also cleared up an Open Meeting Law Complaints against the Gilbert board. It’s really convenient for us average citizens that the AG’s office is a place where everybody knows your name!

Cheers, and keep chirping!

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