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.
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