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10/26/2007
Throw the book at PBCG? - watch your own district!
Monday night, the Racine School Board’s audit committee recommended hiring in-house legal counsel. “An investigation into a contract the district had with a private consultant raised concerns about a lack of legal oversight when former superintendent Tom Hicks negotiated the contract [for business services] with Public Business Consulting Group [PBCG].” (Racine Journal Times) FoxPolitics briefly summarized the gory details earlier this fall.
And legal counsel is exactly what it looks like the Racine Unified School District (RUSD) will need. (Does your school district employ in-house counsel? If not, how much do they spend on outside contracted legal services?)
At least one Wisconsin school district business officer is concerned that Business Officer ethics have been violated in Racine – and that indeed, if violations aren’t prosecuted, not only will taxpayers be the losers, but the integrity of the profession will suffer.
My knowledgeable source references the statutes, plain and simple. First he says, a consultant’s audit report of the PBCG situation is clear on the point that PBCG had administrative authority – and hence all applicable statutes apply. So no weaseling out of the situation because PBCG was a ‘contractor.”
Here’s the deal in my mind. If somebody screwed up (like allegedly PBCG and RUSD), all involved must be held accountable – financially – to the taxpayers of the state (state aids constitute the primary source of district revenues) and the taxpayers of Racine. So first – did PBCG have an unlawful pecuniary interest in RUSD?
Wisconsin statute 946.13:
(1) any public officer who does any of the following is guilty of a class I felony:
(a) if in the officer’s or employee’s private pecuniary capacity, negotiates or bids for or enters into a contract in which the officer or employee has a private pecuniary interest, direct or indirect, if at the same time the officer or employee is authorized or required by law to participate in the officer’s or employee’s capacity as such officer/employee in the making of that contract or to perform in regard to that contract some official function….
Thoughts from a school business officer:“PBCG lead employees clearly had a private pecuniary interest in a substantial contract (in excess of $1 million, possibly up to $3 million) with RUSD. According to [the audit] report, PBCG made decisions to transfer funds from RUSD into their own company’s trust account. They exercised discretion of an officer or employee in performing on this contract. Such conflict of interest issues in fact have been raised in the report and have been admitted to in a statement from RUSD.”
It sure seems like something fishy is going on. And PBCG wasn’t – and hasn’t been – too interested in providing full disclosure to those investigating their practices:
Wisconsin statute 946.72:
Tampering with public records or notices. (2) Whoever intentionally damages…or conceals any public record is guilty of a Class B misdemeanor. “Page 2 of the attorney’s Phase 1 audit report clearly states that “…some RUSD work is done on PBCG computers. Those computers were not made available to Deloitte FAS (auditors) for imaging.” Why not? These records do not appear to be attorney-client privileged work. How can they be legally withheld from RUSD’s auditors? Once again, is it believable that PBCG could circumvent the law by claiming they are contracted employees?” (More on RUSD secrecy from Real Debate Wisconsin)
In summary:
Whether by in-house counsel or the Attorney General, clearly PBCG must be held accountable to all applicable statutes. Once again, an experienced school business officer: “To allow these various statutes to be violated simply because on paper, consultant-administrators are so called contract employees, defies all logic and intent of the statutes designed to protect local governments and taxpayers from such arrangements. Failure by appropriate law enforcement agencies to seriously investigate and review this matter should be considered unacceptable by RUSD [and all other state!] taxpayers.”
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