The Smear Campaign At The Delaware Auditor’s Office & What The News Journal Didn’t Tell You

Revenge is ugly business.  When it takes place at a very high state level and the object of that revenge gets a whole article about it in the state’s biggest newspaper, it is really ugly.

Today, James Fisher and Matthew Albright published an article about the Auditor of Accounts, Kathleen Davies.  The article claims Davies was put on leave over two months ago due to not using the state procurement card for travel expenses.  According to the story, sources who would only be named as “state employees” contacted the Office of Management and Budget, then run by Ann Visalli, in November of 2015.  They alleged Davies spent over $7700 in travel expenses (over four years) and received personal reimbursements instead of using the state p-card.  She did do this.  But was it wrong?  Absolutely not.  I’m not buying any of this.  Let’s take a close look at what else was going on at the time these “sources” (as the News Journal calls them) filed this complaint.

Davies had just come out with a report on many charter schools, not just Delaware College Prep (the only school mentioned in the article).  Kuumba Academy was also named in the report on personal reimbursements as using funds against the accounting policies of the state.  Two other charters did not have any inappropriate use of state funds: Odyssey Charter School and Thomas Edison Charter School.

But there was more going on at that time.  The reports on Family Foundations Academy and Providence Creek Academy had not come out yet.  The September 30th enrollment inspection was just beginning (which was published earlier this Spring and pulled from State Auditor Tom Wagner’s website after Davies was put on leave).  Another Delaware charter school, The Delaware Met, was under formal review.  Hearings and meetings with the Charter School Accountability Committee took place in November and December of 2015.  One of the big questions surrounding Delaware Met was how they were spending their money.  And by default, their operation management company, Innovative Schools, would also be looked at.

There was also an inspection released by Davies on December 7th.  This surrounded an anonymous tip about Delaware Department of Education employees abusing travel expenses.  No wrongdoing was found in the inspection report.  But why would the News Journal not mention such an important part of this timeline in their article as well as the actual inspection?  If this accusation by sources who have now become “whistleblowers” was made to the OMB in November of 2015, this would have been the same time when Davies would have been working on the DOE travel expense report which came out on December 7th.  The timing on this is uncanny!

If it took six months for Davies to be put on leave, what was the OMB doing for six months?  Why did Davies just happen to be put on leave at the same time the DOE was pitching a conniption fit about the September 30th Inspection Report written by Davies?  The report, published by Wagner’s office on May 5th, can be found here.  Why did Wagner pull the report which had absolutely nothing to do with her supposed reasons for being put on leave?  Which other pending audits was Davies working on?  I do know the answer to a couple of these, especially one that I submitted to the auditor’s office.  John Fluharty, the policy analyst from the Auditor of Accounts office, contacted me on March 17th to discuss the tip I sent that office.  I talked to him on March 18th with what I knew.  No follow-up has taken place since then nor has any report been released on my tip.  I find that to be very odd…

And then we have the charter school audit bill crisis.  Delaware State Rep. Kim Williams released three different bills in the first part of the 148th General Assembly.  The first two were stricken in lieu of the third one which passed the Delaware House on June 30th, 2015.  It’s next destination was the Senate Education Committee, chaired by Delaware Senator David Sokola.  Prior to the second part of the 148th G.A. beginning last January, rumors began circulating that Sokola was going to introduce his own charter school audit bill.  With his friends at the Delaware Charter Schools Network, Sokola crafted new legislation which weakened Williams bill considerably.  Williams and Sokola battled publicly on Facebook over the bill, resulting in an eventual compromise a few months later.  They both met with Davies, who supported Williams bill, and the Delaware Charter Schools Network.  The new legislation, House Bill 435, passed both the House and Senate and awaits Governor Markell’s signature.

But the biggest question is this: what did Davies do that was so wrong, that would warrant such a drastic action?  While the guidelines regarding travel expenses published by the News Journal said the state prefers state employees use the p-card, it doesn’t rule out personal reimbursements.  Furthermore, the article states she told employees she was doing this.  If you have something to hide, you don’t tell everyone in the office!!!  The only way she would have been reimbursed for those travel expenses is if someone approved it and saw the receipts.  Who approved the expenses?  More importantly, where is the fire here?

Davies was not put on leave over this.  This is a cover.  The whole thing reeks of corruption at a very high level.  Tom Wagner won’t talk about it because it’s a personnel issue.  So how did the News Journal get the story?  I can tell you this: I was contacted by an employee of the Delaware Department of Education who asked me if I heard about Kathleen Davies.  This was on May 26th, a week after the September 30th report disappeared.  This employee said “word is she had a falling out with Tom Wagner.  And won’t be back.”  Now I hear from sources all the time about different state employees.  But how is that a DOE employee would have intimate knowledge of a situation between Tom Wagner and his second-in-command?  And how in the world would they know Davies wouldn’t be returning?  That would indicate a conversation took place with someone from the State Auditor’s office with either an employee of the Delaware Dept. of Education or an employee of the State Board of Education for that much knowledge to come out for what we are being told is a “personnel issue”.

This is my firm belief: someone was very frightened about an audit inspection Davies was working on.  Something that would make someone or several people look very bad.  This person would have to have the power to be able to pull strings with an elected official to get Davies put on personal leave.  Because this fabricated nonsense about personal reimbursements is absurd.  Other state employees do it.  Even our own Governor was mentioned in an audit report for not following state accounting rules with travel.  Was he put on leave?  Hell no!  Was Tom Wagner put on leave when it was announced he “accidentally” let his own house go into foreclosure?  Nope.

I’ve been going through all district and charter expenses the past few weeks and I can say with certainty that any travel expense amounts incurred by Davies are a drop in the bucket compared to what they spend.  And I seriously questioned one district about an outrageously high amount in one coding area.  No response on that one over two weeks later.  So why target the one person who has the ability to produce reports that can put others in a very bad light over financial abuse?  I believe I just answered my own question.  To pull this off, that takes a serious amount of cunning and guile.  Someone with pull and motivation.  I would have to think Ann Visalli would know that other state employees use personal reimbursements for travel expenses.  I don’t know much about her, except to say she resigned shortly after Davies was put on leave.  The Director of the Office of Management and Budget.  Who resigned before the budget passed.

As for Kathleen Davies, I hope she gets the vindication she deserves from this oh-so-obvious smear campaign against her.  This is a woman who has spent most of her time at the Delaware Auditor of Account’s office finding actual situations of financial abuse and scandal.  Most of them have been against charter schools.  Delaware Military Academy report in 2013.  Academy of Dover, Family Foundations Academy, Kuumba Academy and Delaware College Prep reports in 2015.  Providence Creek Academy, EastSide Charter School and Prestige Academy in 2016.  And potentially more.  But for those reading this smear article on Davies in the News Journal today, they won’t know all of this stuff going on behind the scenes.  So if you read this, please share it so all Delawareans can know that Kathleen Davies is deserving of much more respect than this.  I am positive she has enemies in this state.  Those who expose the truth often do.  Those who do wrong fear exposure more than anything.  So who did Davies frighten so much that they would go to these lengths to remove her and tarnish her good name?

Updated, 6:12pm, 7/31/16: This article has been updated to reflect there was no wrongdoing on the part of Gateway Lab School in any audit report.  This was an error on my end, and I did write an article to apologize to Gateway regarding this.

Auditor Report On 9/30 Enrollment Counts Shows Inconsistency Statewide & Major Reporting Issues At 4 Delaware Charters

Four Delaware charter schools will have to return funds based on 28 students they received funding for from the state based on not meeting specific criteria for those students.  Yesterday, Delaware State Auditor Tom Wagner released the final report of a statewide audit on the September 30th Enrollment Counts which determines how many units a school gets for salaries, energy costs and equalization funds.  The report does an excellent job of describing how funding in Delaware education actually works without needing an advanced accounting degree to understand.  The report showed the biggest problem is inconsistency with the districts and charters on how to submit the data as well as no specific requirements for the school or district unit count coördinator to even attend the training offered by the Delaware Department of Education.

Four charter schools were specifically called out for not having the proper documentation for early Kindergarten entrance students.  This is for students who are considered gifted and talented and are not the age of 5 by August 31st, as required by state law.  The Auditor of Accounts found 28 students at these four charters should not have been counted in the unit count and the schools should return the funding they received for those students.  The charter schools were EastSide (11 students), Family Foundations Academy (12 students), Kuumba Academy (3 students), and Delaware College Prep (2 students).  Given the fact that EastSide and FFA are run by the same executive director, Dr. Lamont Browne, and that over 82% of these unlawful unit count claims are occurring at the schools he runs is very troubling.  As well, the Board President is the same at both schools: Charles McDowell.  FFA already had an audit report released late last year based on the prior school leaders massive fraud and theft of school funds.  Kuumba Academy was spotlighted with irregularities based on an inspection report released last year.  Red flags came up over unauthorized compensation for the Head of School and a custodian.  Delaware College Prep did not have their charter renewed by their authorizer, Red Clay Consolidated School District, and will close at the end of this school year.  They were also mentioned in the same audit inspection as Kuumba with unauthorized reimbursements to their Board President.

One thing the report showed, which I was not aware of, was the role special education service providers play in the unit counts.  According to the below report, providers such as speech-language pathologists, physical therapists, occupational therapists, school psychologists and other providers are based on the following:

1 unit per 57 Regular Education students in Kindergarten to 3rd grade, Basic Special Education students 4th-12th grade, and Regular Education students 4th-12th grade

1 unit per 5.5 Intensive Special Education students

1 unit per 3 Complex Special Education students

If there is one thing I have heard in Delaware it is how schools are unable to provide these services consistently, especially for basic special education students.  This is an even bigger problem with having the unit formula be the same for Kindergarten to 3rd grade basic and regular students.  But all students in basic special education from Kindergarten to 12th grade are not given any advantage over regular students in receiving these services.  This is a major problem and I would urge any legislator to remedy this problem immediately!

The report also highlighted the role Innovative Schools plays in enrollment counts.  The Auditor of Accounts felt Innovative Schools should not be the agency conducting the enrollment counts but the school unit count coördinator.  They advised either way the accountability falls on the school leader.  Several charters and a scattering of traditional public schools were mentioned in the report in various sections covering details such as training participation for the unit-count system and having a clear policy manual on the process.  The full report is below.

Delaware DOE Cleared Of Audit Investigation I Had No Clue About!!!!

How about them apples?  The Delaware Department of Education was cleared in an investigation surrounding their travel expenses.  Delaware has very specific rules about spending state funds for travel, and the Delaware Auditor of Accounts investigated the DOE.  It turns out, someone gave the State Auditor a tip that the DOE worked cushy travel plans into their contracts with American Institutes for Research and Great Schools.  Which would cause the contract to go up, and more money coming out of taxpayer pockets.  How does this even happen and I have no idea it is going on?  I wonder who tipped them off and what they based the complaint on.  Maybe an ex-employee?  Nah, Murphy’s law says it wouldn’t be that guy…

My favorite part about the below audit report: they reviewed the contracts with these companies.  Now I should see if I can FOIA a contract that is part of a state audit investigation from the State Auditor’s office.  The report did find about $42.00 in expenses without receipts.  Shut them down!!!!  The abuse must stop!!!!  I am wondering if the State Auditor goes in order of complaints received.  Cause we still haven’t seen that Family Foundations Academy audit from a year ago.  What’s up with that?

There will be more about American Institutes for Research later on tonight in another article.  Stay tuned!

State Auditor Releases Report On School Tax Collection & Agreed-Upon Procedures

Delaware State Auditor Thomas Wagner issued the annual “School Tax Collection and Debt Service Management Agreed-Upon Procedures Engagement” report for Fiscal Year 2014 on August 14th, 2015.

This includes all school districts.  What is interesting is the four school districts in and around the city of Wilmington.  Due to the restructuring of the former New Castle School District in 1981 into the current four school districts: Brandywine, Christina, Colonial and Red Clay Consolidated, the Delaware Department of Education actually allocates the taxes to the four school districts.  No big mystery or anything, but noteworthy!