Peyton Wolcott - Credit Cards

Conservative Commentary - School district credit card abuse, solutions

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A second look at
Katy ISD's software
developer Xpediant
Leonard Merrell's
choice of technology
consultants was
Xpediant, LLC, which
had to change its name
after it was reported on
this website on April 17,
2006 that "according to
sources within the Texas
Secretary of State's office
this morning, Xpediant,
LLC, 'in our world here
doesn't have an active
entity status' and has
been in a state of
forfeiture since February
13, 2003 because 'they
didn't do their state
franchise taxes,' with the
result that Xpediant 'has
no entity status and no
liability shield.'
Xpediant's 2003 return
has not yet been
received, making it
almost three years
overdue."

Alas. When Xpediant's
owners went to fix things
in Austin, they
discovered their
no-longer- viable
company's name had
been taken by someone
else, so they had to find
a new name.

By Armand Fusco

1. Assume that
fraud, theft, and
embezzlement
are occurring—
look for it.

2. Assume that
mismanagemen
t exists—
look for it.

3. Assume that
there is waste
in the system—
look for it.

4. Assume that
financial
management
controls are
inadequate—
constantly
review and
tighten the
process.

5. Assume that
staff has not
been properly
trained and
educated in
budget
management—
provide on-
going training
particularly for
key personnel.

6. Assume that
there are
employees who
know where
there is fraud,
waste, and
mismanage-
ment—
encourage,
reward, and
resolutely
protect “whistle-
blowers.”

7. Assume that
any report or
information
dealing with
financial
matters does
not provide
sufficient
details—seek
more details.

8. Assume that
board policies
are not being
implemented
properly—
ask for
progress
reports.

9. Assume that
audits do not
uncover fraud—
insist on
forensic
auditing.

10. Accept the
fact that board
members lack
the skills and
knowledge
required to
effectively
monitor the
budget—
provide them
with information
and training.

11. Accept the
fact that
vigilance
must be
constant—good
enough is never
good enough.

12. Accept the
fact that board
members must
have easy
access to
detailed
information and
data that are
used to develop
financial reports
and monitor
progress—
seek to develop
meaningful
reporting
systems.

13. Accept the
fact that
decisions made
by the board will
be scrutinized
by the staff and
the public to
see if their
financial
rhetoric to
protect school
dollars from
fraud, waste
and
mismanage-
ment is
matched against
its actions—
weigh every
discretionary
decision
carefully for
consistency and
common-sense.

--From "School
Corruption: Betrayal
of Children and the
Public Trust"
by Armand A. Fusco

Glenn County ,
California: $244,000
spent under then-
supe Joni Samples'
leadership
By Peyton Wolcott - Copyright 2007 -
Updated Mon., Apr. 2, 2007 - 1 am

To speak
with any
credibility
about goings
on in your
local schools,
you've got to
have hard
facts to back
up what you
say.

Tim Crews
(PHOTO/AP)

The quickest and surest
way to get hard facts is to
file public records requests
as in many instances we
are not able to count on
information from either our
local schools or our local
newspapers for reliable
information beyond sports
scores and school district
press releases--the
so-called "good news" they
seem to be intent on
disseminating--published
as hard news.

then-GCOE supe Joni
Samples and her staffers
amounting to at least
$244,000; items included
Samples' travel such as
trips to Texas which
although financed by GCOE
taxpayers appear to have
been linked to promoting
her book, "Taking the
Guesswork Out of School
Success."

There was also the trip to
Puerto Vallarta with the
stream-of-unconsciousness
email from Joni to Joni
using her GCOE laptop and
the GCOE email service. It's
here in the pink boxes at the
far right.

While Crews faces the
same economic pressures
other small-town presses
do to publish only the "good"
news about local public
education, he has stood
strong against those
pressures despite arson
during the height of his
investigation in the building
next door.

Fortunately, this time, it
appears the good guys have
won:

Puerto Vallarta hotel,
site of GCOE supe Joni Samples'
taxpayer-funded stay

Judge Byrd dismisses
GCBE actions v. Mirror
By Tim Crews/Valley Mirror
Willows—A decidedly
grumpy Superior Court
Judge Don Byrd yesterday
dismissed the coun-ter
actions against this news-
paper. In the complex
CONTINUED HERE

Redbuds blooming
Texas Capitol
Austin

Roslyn, New York:
Another good example
of credit card abuse
By Peyton Wolcott-Copyright 2007
Updated Mon., Apr. 2, 2007-10am

Honor
among thieves
"Former
Roslyn
schools chief
Frank
Tassone is
still paying his
debt to society
at Mid-State
Correctional
Facility in
Marcy, but he's
paid his debt
to the school
district in full
as of Thursday.
Prosecutors
picked up a
check from
Tassone for
$151,960.51
at his

Tassone in
court, cuffed to
hospital bed,
and in prison

attorney's office in Mineola,
the final installment in a
court-ordered restitution of
more than $2.2 million.
Tassone is serving 4 to 12
years in prison for his part in
the school district's $11.2
million embezzlement
scandal ....Tassone is the
first to repay the money he
stole in full." (SOURCE-Karla
Schuster/Newsday)

Let's do the math: Of the
$11.2 that went missing,
$7.5 is being repaid.

Question: What happened
to the other $3.7 million?

Solution # 1
Discontinue district-
issued credit cards of
all kinds

Joe Wise's Delaware audit, Mike Moses' Dallas ISD hireling's conviction,
Arlene Ackerman's $45,000 Diners Club tab at San Francisco USD:
Beginning of the end--finally--for school credit cards?
By Peyton Wolcott - Copyright 2007 - Monday, April 2, 2007 - 1:09 a.m.

Given the amount of
negative press lately,
it's amazing any school
districts anywhere still entrust
credit cards of any kind to their
employees.

Often, problems with out-of-
control credit card spending
are indicative of things out of
control elsewhere in school
districts, Frank Tassone's
leadership in Roslyn, New
York and Joni Sample's in
Glenn County, California (at
right) being two relevant
examples.

Let them eat $49.95
lobster dinners
Supe Joe Wise:
$75,722.97/Christina, DE

According to an audit by Dela-
ware Auditor of Accounts
Thomas Wagner covering
then-supe Joseph Wise's use
of "Super Cards" during his
employment in Christina
schools (Wise left for Florida's
Duval County schools in
December 2005), Wise spent
$75,722.97 on 565 transac-
tions during the 28 months he
was employed by Christina,
about $2700 per month on
average.

A rose is a rose
is not a credit card
Whether they're called P-Cards
(Dallas) or Super Cards
(Christina), credit cards by any
name at schools mostly stink.

Let's take a quick swing across
the states, east to west, see for
ourselves what's up, examples
of spending both un-wise and
Wise.

Among the audit's findings:
o A "substantial financial
deficit" in the district.
o The district and Wise "did not
comply" with state and district
guidelines.
o Wise "did not maintain
detailed itemized receipts for
the majority of meal purchases.
For the majority of meal
transactions, it could not be
determined if alcohol was
purchased."
o "Numerous airfare transac-
tions were for flight change
fees and excess baggage fees.
o "The District and [Wise] were
in positions of trust. Taxpayers
entrusted [Wise] and the
District to follow prudent
business practices and to
spend money wisely and in a
conservative manner. For
numerous transactions, the
District and [Wise] did not act in
the best interest of the
taxpayers."

Flowers, gifts, other specifics:
o $29.99 for an in-room hotel
movie.
o $1,763.42 (FY 2005) and
$2,447.78 (FY 2006 f)or
books--all of which apparently
disappeared when Wise left.
o A $278 meal for Wise, a

Hotel DuPont, a Wise favorite

Among the audit's rec's:
o "Reassess the control
environment and the tone set
by management."
o "Act in a manner that does
not give the appearance of
deception or inappropriate or
questionable business
practices."

Post-audit
improvements in
Christina:
As part of district-wide belt-
tightening to address
Christina's post-Wise deficit,
Lillian Lowery, the new supe,
only spent as much in her
entire first year at
Christina--$2,780--as Wise
spent on average in each of
his 28 months. "All state-
issued credit cards issued to
Christina School District staff
were deactivated effective April
28, 2006," reports a district
spokesman, adding the
District currently has only two
active credit cards. "As part of
the District’s ongoing financial
recovery, travel and conference
expenditures have been
significantly reduced and
unnecessary travel is not
approved."

board member and four
employees, including $49.95
lobster dinners.

$49.95 lobster dinner

Where didn't Wise go?
Delaware taxpayers paid for
travel to edu-conferences in
New York, San Francisco,
Maryland, Pennsylvania,
Orlando,Chicago, San Diego,
Boston and Michigan, plus a
Broad Conference in
Washington, D.C.

Audit details here:
www.delawareonline.com/assets/pdf/BL
67339326.PDF

Mike Moses' hireling:
Let them buy a $1,200
mattress pad, charge it
to "Homeless"
Secretary Marsha Ollison;
$56,000/Dallas ISD, TX

Working in the "Office of the
Superintendent" in a culture
in which the bosses were
recipients of vendors'
largesse, one recent example
being former Dallas ISD tech
director Ruben Bohuchot,
Marsha Ollison charged
$72,053.60 to her DISD credit
card during the two-year
period chronicled on
Dallas.org at right, and a total
of $92,000 during 2003-06.

Last Wednesday Ollison was
"found guilty of three felony
counts of theft from an
organization receiving federal
funds"; $56,000 of the total
was found to be for personal
expenditures. "Ms. Ollison
could receive a maximum
sentence of 30 years in
prison and a $750,000 fine.
Senten-
cing is scheduled for July 30."
Among Ollison's personal
purchases: clothing, vases,
underwear and
groceries.(SOURCE--Kent
Fischer/Dallas Morning News)

Unfortunately, Ollison wasn't
the only person to charge
large amounts to the district's
credit cards; this past
February another secretary in
the supe's office, "Gloria
Orapello, pleaded guilty to
one count of felony theft for
charging $100,000 in
personal purchases to the
district.
Federal agents continue to
investigate employee credit
card use. District officials
have said that as many as 10
employees could face
criminal charges and as
many as 600 others could be
disciplined administratively. At
least eight employees have
been placed on leave." (Ibid.)

As an example of large sums
spent using Dallas ISD credit
cards by other employees,
Kathy Groppel, employed as
an "itinerant teacher" in
DISD's special ed
department, spent
$43,217.81during the first
three and a half months of
2004; charges included
$11,000.00 at WalMart
located in Mesquite ISD. At
the time Kathy Groppel made
these purchases, her
husband Larry Groppel was
employed by Dallas ISD as
deputy superintendent for
business services; he took
over as interim supe when
Mike Moses left in July 2004.
More about Larry here.

Donna Garner describes
events occurring during
former Texas Commissioner
of Education Mike Moses'
2000-2004 DISD
superintendency:

Solution # 3
If you must have one
credit card for travel
-- if school employees
really must travel --
restrict use to
emergencies only,
and keep card in a
locked drawer at your
administrative offices.

Procurement cards, introduced to
Dallas ISD during Mike Moses' (L)
tenure, were suspended last year by
DISD supe, Mike Hinojosa (R)
following expose on abuse in Dallas
Morning News--a year after Allen
Gwinn broke the story online.

Arlene Ackerman (left); Joseph Wise
(PHOTO--AP)

Allen Gwinn's site here:
www.dallas.org

In 2005, after filing a public
records request for Dallas
ISD's credit card receipts,
Dallas.org founder Allen
Gwinn posted and
cross-sorted them for his
readers; you can see for
example which DISD
card-holders used their cards
on weekends at convenience
stores.

If, say, you're curious about
spending by DISD employee
Marsha Ollison (mentioned at
left), in addition to learning
that she's employed in the
"Office of the Superinten-
dent"--which does not appear
to have been mentioned in
print coverage--you can see a
complete list of all of her
expenditures in a running
tally for the $72,053.60 she
spent from Jan. 4, 2004
through Dec. 29, 2005.

Where did the money get
spent? One Sunday in March
two years ago, Ollison went
shopping:

Notable exception
Publisher Tim Crews at the
award-winning Sacramento
Valley Mirror has worked
tirelessly and fearlessly this
past year to expose
goings-on in the Glenn
County Office of Education,
including GCOE credit card
expenditures.

Joni Samples

$244,000
Via a series of
increasingly
contested
public records
searches,
Crews found
charges by

FedEx/Kinko's
Golf tourney =
business at Dallas
ISD

"In October 2003 the Dallas
School Board signed off on a
'rough draft' of a contract
between the district and
FedEx/Kinko's.

"When the final contract was
signed, however, a special
provision had been added for
DISD employees: Entry into
the Pro-Am [golf tournament]
cost $10,000 per foursome,
or $2,500 per golfer...The
package included airfare to
Austin, a banquet, two nights
at the resort and a $500 gift
package of equipment and
clothes.

"On top of that, 'Across the
entire Dallas Independent
School District, copying and
printing costs more than
doubled. In 2003, the district
spent $5.87 million; by 2005
it was spending $12.82
million...'

"Here is yet another mess
which the new Dallas ISD
superintendent, Michael
Hinojosa, is having to clean
up which occurred under
Mike Moses' watch....

Bracewell, Voyager
"The questionable practices
which occurred under Moses'
administration seem to be
mounting -- Bracewell &
Patterson and private
consultancies, questionable
bond sales, the federal funds
misspent under bilingual
education, the Bohuchot
technology and Kinko
scandals, the unusually
close ties with Voyager
Expanded Learning, and the
$2000 superintendent's
[ERDI] fee to hobnob with
vendors.

"It is interesting to me that
while Moses was the
superintendent, he had such
a tight grip on the district and
the school board that nobody
dared question his dealings
without fear of retribution.
Now that Moses has left the
district, 'the dirt is coming out
from underneath the rug.' "

More from Donna Garner here.

Marsha Ollison's
Sunday shopping
with Dallas ISD
credit card

$ 311.21 Marshalls
$ 464.47 TJ Maxx

Solution # 2
All school districts
across the U.S. post
their entire check
register (save salary,
stipends and
HIPAA-relateds) online.

Is this woman at right
smiling because of her
$375,000 exit gimme or
because taxpayers
have picked up the tab
for her luxury
hotel/meals ?
Supe Arlene Ackerman:
$45,000/San Francisco USD

SAN FRANCISCO USD'S
SUPE LIVING HIGHER ON
THE HOG THAN THE
MAYOR
By Peyton Wolcott
February 23, 2006

San Francisco Unified's
superintendent Arlene
Ackerman has been claiming
the kids come first but once
again Arlene has proven that
Arlene comes first.

Why else would she be treating
herself to a $325,000+
bailout--plus unused sick and
vacation time--when she leaves
SFUSD in a few months? Why
not leave it on the table if she's
really "for the kids"--$325,000
equals ten starting teachers'
salaries.

As the San Francisco Bay
Guardian points out in their
editorial this week,
"Symbolism is a big part of
running any institution, and
when it's a public institution, the
way things look really
matters. So even if the $84,000
that top school officials in San
Francisco spent on travel and
meals in 2005 is just
a small fraction of the district's
budget, it looks terrible for the
superintendent of a district
that's closing schools for
budget reasons to be eating
meals at fancy restaurants and
staying in $350-a-night hotel
rooms on the public
dime.

The mayor of San Francisco
doesn't do that: When Gavin
Newsom travels, he abides by
the city's rules, which limit
reimbursable hotel and food
expenses to about $200 a day.
[Newsom] doesn't have a city
credit card, as Ackerman does
(in fact, as Tali Woodward
reported last week, nobody in
city government gets a credit
card)."

According to Woodward's public
records searches, Newsom
spent "a grand total of
$2,265.69 on official travel" this
past year, compared with
Ackerman's $45,000--on a
single credit card (Diners Club).

Re JARDINIERE
(above),
site of Ackerman's
working lunches:

"Service to die
for. Wine prices
that'll kill you.....
The food is
top-shelf, if not
life-changing. The
service is the
best I've
experienced in
years of San
Francisco dining....

Jardiniere is
strictly on the
'nobody's
looking at my
expense
account' list
rather than the
'special occasions
with loved ones'
list.

(SOURCE--Stephen
Howard-Sarin/
AMAZON.COM)

SAN FRANCISCO USD'S ARLENE ACKERMAN:
ONCE MORE, WITH FEELING
By Peyton Wolcott - February 11, 2006

Here we go again.

Watching Arlene Ackerman depart San Francisco public schools is
like watching a train wreck.   You know it's going to be big and noisy
and messy and you can't not look.   And there's not a blessed thing
you can do about it even if you're a sitting SFUSD board member
because what needs to be done you as a board member should
have done years ago.

First there were the clues from Ackerman's earlier employment
history: Wouldn't you think twice about hiring a disgrunted employee
who sued her employer (University City School District in Missouri) in
1992 for $200,000 then settled then refused her old job when it was
offered back, even after having won the concessions for which she
sued? (Source for the $200,000 figure: Jay Mathews of the
Washington Post.)   (For more, see Ackerman's bio on my
"Administrators on the Move, Educators in the News" page, link at
left.)

Then there was the July 2004 piece in a major American paper
clearly listing Ackerman as an ERDI consultant. (For more, see my
"Education, Inc." page, link at left.)   Far from alarms going off in the
SFUSD board room, this appeared to have elicited nary a
comment--none that appeared in print, anyway. Did the SFUSD
trustees
even know? If not, why not? And where was the San Francisco
press? Well, we know where one was--Heather Knight of the
Chronicle was letting Ackerman pick up her meal tab at a pricey
eaterie (see "The Media" page).

PW NOTE: I first wrote Ackerman on January 2 asking about her
side consulting, got an evasive answer a few days later on January 5
then immediately asked her again, this time specifically about Broad
(The Broad Foundation) but Ackerman has still--six weeks later--to
respond.   (See "Administrators on the Move" page (Aa-Ald))

Ackerman bails with a $375,000 "be nice" parachute--plus $45,000+
for travel, meals And at this late date we have the SFUSD trustees
asking Ackerman to leave behind the $375,000 "be nice or I'll take
my toys and leave" settlement for which she asked and to which they
agreed back in November 2004.

HOME

U.S. snapshots:
Credit card abuse

ARIZONA
"A Concho man and two others
were indicted on Tuesday by
Arizona Attorney General Terry
Goddard on a variety of theft and
fraud charges related to their
work for the Red Mesa Unified
School District [below] located in
Teec Nos Pos on the Navajo
Reservation....Former Red
Mesa School District Business
Manager Stewart Waite, 35, of
Concho....is alleged to have run
up a credit card bill of more than
$260,000, while [Former school
superintendent William Bean, 52,
of Phoenix] allegedly accrued
over $83,000 in credit card
charges that were used for their
own benefits. (The White
Mountain Independent/April 2007)

'13 Guiding
Principles'

Mike Moses' $75 mil PCards (Dallas ISD/TX) . . . Tassone, Gluckin (Roslyn/NY) . . .
Arlene Ackerman's $45,000 Diners Club (SFUSD/CA) . . . Joni Samples (GCOE/CA)

Solutions for credit cards
abuse: Easy as 1, 2, 3

CALIFORNIA
An ongoing 18-month investiga-
tion into the Ravenswood City
School District's financial
practices has resulted in the
charging of a former assistant
superintendent with misuse of
public funds. Violet Forbes has
been charged by the San Mateo
County District Attorney's Office
with five felony counts of embez-
zlement and misappropriation of
public funds, according to Deputy
District Attorney Peter Lynch
[who] said the investigation had
found personal charges made on
the school district's credit card...
$5,322 that Forbes had not repaid
...Most of the whited-out areas
were improper uses and had not
been repaid...Forbes eventually
repaid the money she owed, but
not until charges had been filed.
(Palo Alto Weekly/Jan. 1999)

MONTANA
St. Regis School District clerk
Julie Downing (above)
embezzled $514,000 from her
district primarily through credit
cards and cash advances.
"Vacations, tickets to a Rolling
Stones concert, season tickets
to University of Montana football
games--these are just some of
the things Mineral County
officials believe...Downing
purchased with taxpayer money
over a seven-year period."
(VINCE DEVLIN/The Missoulian,
Feb. 2007) (PHOTO Mary Jo
Berry/Clark Fork Chronicle)

UTAH
Denise Aughney (above), who
embezzled $1.25 million from the
Weber School District Foundation
will serve more than 11 years in
prison, the Utah Board of
Pardons and Parole announced
Friday. Denise Aughney, 48,
has a parole release date of Dec.
4, 2018. Charged in 2nd District
Court with 55 counts of theft,
money laundering and forgery,
Aughney pleaded guilty last year
to 45 counts. (The Salt Lake
Tribune/Jan. 12, 2008) Aughney
forged foundation checks to her
credit cards and personal
accounts. She then used credit
card checks for personal
expenses, according to court
documents.(Standard/June 2007)
(PHOTO--Mike Terry/Deseret
Morning News)

We're off to a great start, with
already, as of February 2008,
almost 150 school districts
voluntarily posting their check
registers online.

Wondering how to ask your
own local district to voluntarily
post? More here

The SFUSD board appears to have just recently thought about looking into Ackerman's personal
spending--which this past year surpassed the $45,000 mark for travel and meals.   HELLO. You
don't hand any employee anywhere a piece of plastic and then not check in on them from time to
time. But this is typical of most school boards in America.

One of Ackerman's more extravagant trips was connected with The Broad Foundation awards
ceremony in Washington, D.C. (she was named as a finalist).   Ackerman "signed the tab for a
$789 dinner last Sept. 18" at Morton's; other trip costs included "hotel charges of more than
$3,500, another $559 meal, $144 for airport parking, and–you guessed it–another trip to Morton's
(this one costing only $277). It does not appear from the records that the Broad Foundation
covered any of these expenses, though it is noted that the foundation paid for Ackerman's own
room at the Mandarin Oriental Hotel." (SOURCE--Tali Woodward/San Francisco Bay Guardian)

And now comes the bonus round: Ackerman's hired an attorney, claiming she's being
"harassed" because the board's looking at her spending. "I’m not going to be villainized on my
way out,” she said. (SOURCE--Bonnie Eslinger/San Francisco Examiner)

A disgruntled employee who sued her school district in 1992 would be likely to do so again.
Leopards don't change their spots.