Mindy Chambers, spokesperson for the state Auditor's Office, has responded to my request for the names of the vendors who received money from the Seattle School District for basically doing nothing to help it. This alleged financial fraud is currently being investigated by the King County Prosecutor's Office as well as the Seattle School Board.
A report from the State Auditor's Office revealed that the district spent up to $1.8 million on contractual services involving a small business program that were never carried out or did not benefit the school district in any way.
The audit says that in some cases, the vendors did not know that the small business program manager, Silas Potter, was not authorized to contract with them. Seattle Public Schools employees told the state auditor's office that the "district did not receive much benefit from work provided by several vendors" and that Potter "wanted support from prominent members of the community."
Included in this vendor list are non-profits, business leaders, community activists, and a former legislator. Perhaps the biggest chunk of change went to a non-profit, Gracy of Mercy, which was paid $163,000 for instructional services on days when no classes were held, the audit said. Warning: this laundry list of mostly-bogus contracts will make you really mad:
1. The district paid Port of Seattle's former director of social responsibility Elaine Ko, community activist and business leader Eddie Rye (know for spurring King County into changing its logo from a crown to the image of Martin Luther King Jr.), former state legislator Velma Veloria, and former state chair of the Washington State Democratic Party Charles Rolland for meetings with state legislators and testifying on legislation. The audit says that these vendors were unaware that Potter was not authorized to contract with such services.
2. The district paid consultants Rye, Rolland, former executive director of the Washington State Commission on African American Affairs Tony Orange, and Ginny Noble to attend weekly meetings at the district's administrative offices. Although these meetings lasted 1.5 hours, the four consultants billed the district two to three hours for these meetings, the audit found.
3. Some vendors charged an hourly rate, yet billed the district for the same amount each month, according to the audit. These vendors—Ralph Ibarra, Contractors Resource Center, and Platinum Group—"divided the total contract amount into equal segments, regardless of whether services were provided on dates for which they billed."
4. The district paid mentoring and event management company Banner Cross $74,780 to develop training materials, but the audit found that most of these materials were copied from other sources. Banner Cross is owned by Leon "Skip" Rowland, currently listed as the executive director of the Urban Enterprise Center at the Greater Seattle Chamber of Commerce.
5. Additionally, the district paid Banner Cross $7,213 for providing food during classroom trainings to participants who were not district employees, with charges ranging anywhere between $737 to $1,652 per month. The audit says that district records do not "show the public purpose" of providing free meals to the public.
6. The district paid Charles Rolland at least $6,000 to create and maintain a database for the small business program’s apprenticeship program. Although Rolland charged for at least 120 hours to develop the database, district staff said in the audit that it was not functional when they received it. When the auditor's office examined the Washington State Auditor’s Office database, they noticed it only contained a list of student names and other identifying information.
7. The audit says the district paid Tony Orange for attending three-hour meetings up to its entirety, but found that Orange rarely attended the meetings, and when he did, barely stayed for 30 minutes. The audit also said that Orange billed excessively for an apprenticeship program—nearly $60,000—that recruited only 150 people.
8. The district paid community-based non-profit Urban League $25,000 for a software subscription fee for a database designed to match small business owners with general contractors. Urban League told the state auditor's office that this database was not functional and district employees said they never used the database. Additionally, the audit found that Urban League charged the district for indirect costs which sometimes exceeded direct costs by three times.
Read Seattle School Board President Steve Sundquist's response to the audit here.