Sussex Tech Senior Administrative Officials Placed on Paid Leave

The Sussex Technical School District Board of Education has voted to place senior administrative officials on leave with pay pending the outcome of the investigation into issues raised in a recent audit, the district said in a statement.

The district would not comment on who the senior officials are, but the district did say John Demby and John Sell, the supervisor of support services and principal, respectively, will be running the district's day-to-day operations.

The move comes after an audit, released on June 9, detailed financial mismanagement by the district.

After receiving an anonymous complaint about the district's financial practices, state Auditor Tom Wagner investigated the district and found a local businessman, Michael Horsey, and his company Common Sense Solutions, or CSS, was able to sell a piece of property for nearly double what he bought it for two weeks earlier.

Sussex Tech needed that specific piece of land in order to complete a $205,699 high school bus entrance project and made that publicly known several years ago.

Horsey purchased the property in 2012 — after the district made its intentions known — for $111,000. He then sold it to Sussex Tech for $200,000 two weeks later, the report said.

According to Wagner, the district did not perform a fair market appraisal of the land before the deal.

"Which is troubling," Wagner said. "Because it goes against the grain of how a government entity should buy property."

Several months later, Horsey was given the contract to redevelop the same piece of property and construct the new bus entrance.

In the course of the audit, it was discovered that Sussex Tech then awarded CSS additional contracts for other projects by "piggybacking" on the bus entrance.

Two additional projects — renovations at the high school and heating, ventilation and air conditioning work — were both more expensive than the bus entrance. The district received a legal opinion stating the HVAC work and the bus entrance were similar, however, Wagner said the documents provided to the attorney were not the same ones used to put the project out to bid.

"You have to ask, was the attorney's decision based on fraudulent info?" he said.

According to the audit, the district awarded CSS nearly $4 million in district contracts without state approval between July 1, 2011, and Nov. 4, 2016, without bidding on any additional projects, and expenses were split up so the district would not need to submit them to the state.

If expenses are below $5,000, they do not need to go before the Division of Accounting for signoff. The state of Delaware itself reviews expenses because it pays for 60 percent of school construction projects.

According to the audit, emails show the former director of facilities instructed vendors to split up invoices to make them less than $5,000, therefore not needing state approval.

"The School Board entrusted Sussex Tech administration to make decisions regarding the construction projects with the School Board's involvement which created a lack of accountability," according to the auditor's report.

A former Sussex Tech director of facilities, who retired in July of 2015, works for CSS, where he acted as the project coordinator and liaison for Sussex Tech projects.

The projects are the same contracts he awarded to CSS and managed while being employed by the school.

"Sussex Technical School District is currently attempting to improve both process and procedure as it applies to the appropriate scrutiny of transactions and enforcement of fiscal policies," the district's response to the auditor's office said. "Decreases in personnel over the years has led to many individuals wearing various hats and/or splitting job duties, this has presented challenges as all were learning and continue to learn their role and responsibilities.

"All input will be synthesized and assist with our efforts moving forward. As of June 30, 2017, the contract with Common Sense Solutions will come to an end. There are no further plans to utilize CSS's construction management services beyond that point."

Article originally published here.

Old Sussex Tech Lawsuit Has Renewed Significance

We have discovered more news about a previous post. A few days ago we received word about a lawsuit that alleged Sussex Tech stole mass quantities of books.

WBOC investigated, and they have discovered more information. Full article below.

In light of a recent audit into Sussex Tech's financial procedures, one man says his experience has new relevance.

Tom Keeton used to teach at the adult division of the school. He says when he worked there, he noticed an employee was copying textbooks.

"When I contacted the sales representative they laughed and asked if I was crazy," he says. "I asked they had given authorization and they laughed and said 'That's how we make our money, we did not.'"

Keeton says the copied textbooks totaled about $500,000 in lost profits for publishers. He says he brought it up to the principal at the time, and her first response was asking him who knew about this. Keeton says the principal later stated that "other people have been out to get me." He says she also asked if anyone should be fired. Weeks later, Keeton says that was him.

"I can't see any other reason why they would fire me other than the copier question," he says.

Keeton filed a lawsuit claiming the district retaliated against his free speech by bringing up this issue. The suit was settled for $95,000 earlier this year. It is important to note the settlement is not any admission of guilt nor finding of liability. WBOC reached out to Sussex Tech repeatedly about this suit. Neither calls nor emails were returned.

Keeton contacted WBOC after the district's recent audit. He wants taxpayers to know exactly what's happened there, he says.

"When there's smoke, there's fire," he tells WBOC. "Unfortunately the culture that gets established is hard to break."

The lawsuit can be read here.

Article was originally published here.

Sussex Tech Whistleblower Lawsuit

Sussex Tech has shown a strong pattern of fraud and corruption in the past few years. We've uncovered another lawsuit that was filed in 2014 concerning misappropriation of food funding. The Plaintiff alleges that he was terminated after he alerted auditors to the misspent funds.

The Cape Gazette covered the case in 2015, and according to a records search, the case has not yet gone to trial.

A former nutrition supervisor at Sussex Tech is suing the district after he says he was wrongfully terminated for reporting the purchase of video equipment out of the school's food account.

John Gary Woody worked for seven years as a nutrition supervisor for Sussex Tech, with 23 years of experience. He said he consistently received excellent reviews, and he received no reprimands or disciplinary actions. Through sound management and fiscal decisions, Woody said, the cafeteria account had more than $500,000 in 2013.

At the same time, the Sussex Tech School District was encountering financial difficulties because of decreasing revenues. Woody said his position should have been immune to the district's financial woes because the state pays 70 percent of his salary and the remaining 30 percent was covered by money generated from food sales.

In October 2013, Woody said he was contacted by federal and state auditors about the removal of funds from the cafeteria account. Auditors said more than $8,000 was removed; Woody said Principal John Demby purchased televisions and audio equipment for the cafeteria.

Woody said he worked with auditors in a protected whistleblower capacity to resolve the misappropriated funds.

“Any purchase made out of the account must be for child nutrition. They would have had to use the televisions to show only information on child nutrition in order for it to be a legitimate expense. Instead, they used the TVs for sports and other shows,” Woody said.

When administrators realized that Woody had been involved with the audit of funds, he said, his work relationships changed.

Woody said a proposed purchase for the cafeteria was refused, and he endured negative comments from administrators.

Four months after speaking with auditors, Woody said, his job was terminated. Assistant Superintendent Curt Bunting told him the district did not have enough money to pay him, even though, Woody said, his position is funded differently from teachers and administrators.

Woody said Sussex Tech officials retaliated against him for reporting mismanagment of funds by terminating his employment.

“Defendants nonrenewed plaintiff's contract in retaliation for his protected acts in violation of the Delaware Whistleblowers' Protection Act,” the lawsuit states.

The lawsuit, filed in 2014, asks a jury for back pay, attorney's fees, a reinstatement of his position as child nutrition supervisor with a 10-year contract and pay until he is reinstated. The lawsuit also asks Sussex Tech to expunge Woody's records relating to his termination and other relief the court deems appropriate.

In its response, Sussex Tech denied most allegations in the lawsuit. The district acknowledged Woody was an employee who had received favorable evaluations and that the cafeteria account was profitable prior to 2014.

However, Tech's response states parents, students, administrators and the school board were concerned about the quality of food served.

“Plaintiff was aware of these concerns but resisted change,” Tech's response reads. “Costs associated with addressing these concerns predictably eliminated the profitability of the child nutrition services operation, and it was not profitable in fiscal year 2014.”

Tech also admits there was a review of expenditures out of the child nutrition account, but the review team disagreed with Tech's rationale for using child nutrition services money for the expenditures.

“The district believed they were correct but recoded 100 percent of technology purchase,” court papers state.

School board President Patrick Cooper would not comment on the lawsuit because it is a personnel issue.

On Nov. 16, Tech asked Superior Court Judge Jan Jurden for summary judgement on all counts. An argument for summary judgement will be held Jan. 25, 2016, with both sides attending.

A jury trial remains scheduled for April 11, 2016.

Former supervisor John Gary Woody sues Sussex Tech for loss of job was originally published here.

Sussex Tech Stole Over $500,000 in Books?

The recent scandal at Sussex Tech may only be the tip of the iceberg. A tipster alerted us to a 2015 lawsuit filed by a former employee.

In court documents, the employee alleged that Sussex Tech operated a wholesale operation of copyright infringement totaling in excess of $500,000 of stolen materials.

Plaintiff also alleges that for many years, he was aware that Defendant Corder had been copying and/or approving the copying of textbooks, but that Defendant Corder had told him that she had permission to do so.  On May 26, 2015, shortly after becoming aware that Defendant Corder did not, in fact, have permission to copy textbooks, Plaintiff presented to Defendant Corder a list of copyright infringements "totaling almost half a million dollars that Sussex Technical Adult Division had been and was engaging in[.]" Plaintiff proceeded to tell Defendant Corder that the illegal copyright infringement she had sanctioned "was wrong, illegal, had to stop, but also had to be rectified so as to make Sussex Technical School District in compliance with the law."

Associated Court Filing: Here

In our research, we discovered that this lawsuit was settled in January 2017:

If there are any more tips concerning this controversy, please comment below or send us an email. We were unable to obtain all of the court documents because they are behind paywall services related to the federal court system.

UPDATE: Auditors Uncover Alleged Financial Improprieties in Sussex Tech Audit

A Delaware businessman sold a piece of property to a local school district for almost double what he paid for it two weeks earlier, then received millions of dollars from the district for construction management work that skirted state bidding and purchasing requirements, state auditors said Thursday.
  
The findings were released following an investigation prompted by an anonymous tip regarding Sussex Technical School District's dealings with Laurel businessman Michael Horsey.
  
Auditors found, among other things, that after sitting in on a December 2011 planning meeting between district officials and state transportation officials regarding a new school bus entrance, Horsey -- through one of his businesses -- bought a piece of land needed for the project for $110,000. He sold it to the district two weeks later for $200,000, an 82 percent increase.
  
Sussex Tech then awarded the construction management contract for the bus entrance to Common Sense Solutions, another business owned by Horsey, for almost $206,000.

Auditor Finds Financial Mismanagement at Sussex Tech

A state report found evidence of widespread financial impropriety at Sussex Technical School District, in which a local developer has appeared to profit.

After receiving an anonymous complaint about the district's financial practices, state Auditor Tom Wagner launched an investigation. His office found that a local businessman was able to sell a piece of property to the district for nearly twice what he bought it for just two weeks earlier. Then, his construction business was awarded nearly $4 million in district contracts without state approval.

District administrators did not

Indian River Chief Financial Officer Resigns Amid Audit

Patrick Miller, chief finance officer at the Indian River School District, has submitted his resignation, effective June 30.

Miller was placed on paid leave April 24 after questions were raised about district finance records. He remains on paid leave until the end of June.

Miller has held the job since 1998. His current salary is $162,268.

The school district's annual budget is about $50 million annually.

Meanwhile, State Auditor R. Thomas Wagner Jr. and his staff have already begun an audit of Indian River finances.

The school district has not revealed what led to Miller's involuntary leave — or the state audit.

"The district’s finance office is currently receiving assistance from the Delaware Department of Education and another local school district," said Superintendent Susan Bunting in a statement. "It will continue to conduct its business as usual during the transition to a new Director of Business.”

Miller also had been audited in his previous job as chief financial officer of the Brandywine School District. He faced criminal charges as the result of that audit and resolved his legal troubles by entering a no contest plea before Superior Court Judge Carl Goldstein.

Settlement of those charges came after he began his new position with the Indian River School District.

Despite Miller's resignation, the state audit will continue.

Indian River Chief Financial Officer Resigns Amid Audit was originally published here.