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State Auditor’s Report

October 30, 2012

The State Auditor yesterday released a report reviewing the financial management of the Oklahoma State Department of Education Innovation 2011 summer conference. Before I get to the eight key findings of the report, it’s important to remember that Superintendent Barresi and her staff made several critical statements about the previous regime and their use of private donors for conferences. They called it a “slush fund” and questioned the oversight of the board of the “shadow organization” that was taking donation during SDE work hours.

Here are the findings:

  1. OSDE officials solicited, collected, and deposited funds in an unofficial and unauthorized bank account purporting to belong to a private non-profit organization.
  2. An apparent verbal agreement was the only basis for the relationship between OSDE and the Foundation. There was no written contract.
  3. The Foundation’s Board of Directors never met and never voted.
  4. OSDE officials apparently discussed and may have determined the amounts to be paid to Foundation officials from the Foundation bank account.
  5. In addition to the pay for Foundation officials, OSDE exercised at least some control over other Foundation expenditures.
  6. OSDE paid $16,429 for an overdue bill that appeared to be a Foundation obligation and not a debt of the State of Oklahoma.
  7. Near the end of our fieldwork, both the Foundation and the OSDE adopted the position that OSAI had no authority to review the “private” records of the Foundation.
  8. The Oklahoma Department of Education did not follow state law in “contracting” with the Foundation. We disagree with the position that the Foundation’s records are not subject to audit.

Other findings not enumerated at the beginning of the report (which you should read in its entirety) include the fact that Superintendent Barresi asked for the audit and that Pearson (until recently, our testing vendor) made significant donations to the Foundation. Auditor Jones rightly points out that there is an inevitable mix between state vendors and exhibitors. Conferences are not feasible without exhibitors.

Some of the findings of both reports don’t bother me at all. State employees work tirelessly to host a conference. To do extra things for attendees, they accept donations. Both Superintendent Garrett’s staff and Barresi’s have done this.

It’s the self-righteousness that bothers me. Sure, Barresi is ready to move forward. She had a different posture entirely back in March, when she not only criticized similar past practices, but disavowed knowledge that she had been listed as a member of the OCIC Board that had organized previous conferences.

In the end, this is mostly about sloppy bookkeeping. State employees should exercise caution soliciting donations on state time. The SDE will continue rebranding itself and having summer conferences, and it will continue supporting activities for participants with the help of donations from people who have an interest in getting their names and faces in front of school people.

Just be smart about it.

And next week, at the REAC3H Summit, try not to wonder who paid for the coffee and pastries.

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