The chief internal auditor for the Dallas Independent School District went before school board trustees Tuesday to complain about their plan for a "peer review" of the audit program that’s uncovered alleged fraud and waste.
A former Dallas ISD employee who claimed to have been fired for being a whistleblower about the problems was there to support the auditor.
The controversy over spending comes as the district plans to ask voters to approve a record large school improvement bond referendum this year, perhaps $3.7 billion.
Steve Martin has only been the Dallas ISD Chief Auditor for a year, but in that time his office has completed, or is working, on reports that he said total $1.7 million of possible money overpaid by the district on nine construction projects.
“Nobody has demonstrated we got any reports wrong,” Martin said.
The meeting of the board’s audit committee Tuesday included an item to "Consider and Take Possible Action to Order a Peer Review of the Internal Audit Plan and Office Operations."
“As a federal investigator for 24 years, I understand that when a case against a defendant is air tight, defense attorneys investigate the investigator. That’s what is happening now,” Martin said.
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Martin’s reports on roof repairs at Dunbar Learning Center and Gooch Elementary School said Dallas ISD staff helped contractors split bills to keep them below the $500,000 threshold for school board review. On those two projects alone, the audits said the district may have overpaid more than $300,000.
Former employee Zachariah Manning said he was unfairly terminated for speaking up about what was happening as a project manager on those jobs in the capital improvement project department.
“I informed my director and executive director back in 2015 that this was occurring and they dismissed it as if I didn’t know what I was talking about,” Manning said. “I got terminated.”
Manning said Martin’s audits confirmed the problems he first reported. Manning said it looked as though Martin was being treated the same way he was.
“It’s the same play book, and they’re using the same plays that they used to terminate me,” Manning said.
Martin said peer review of Dallas ISD internal auditing was scheduled for 2021. On the past five audits his office has returned, Martin said Dallas ISD management has requested 45 days to bring in third-party review of the results.
“It indicates a lack of confidence in our audits for which there is no basis,” Martin said.
There are just three trustees on the audit committee: Edwin Flores, Dustin Marshall and Maxie Johnson.
Flores and Marshall said peer review was routine and denied it was intended to derail audit results that have been received.
“A peer review is something that’s done very commonly among auditors. In fact, auditors welcome the opportunity to have peer review done,” Flores said.
Marshall said he was grateful for Martin’s reports and took the issues very seriously.
“This item is not about re-litigating those audits. It’s not about saying those audits were wrong. It’s not about trying to cover up those audits,” Marshall said. “It’s merely looking at the audit plan, the things that are set for future audits and assessing whether or not that’s the appropriate list of things.”
Marshall said reforms have already taken place to correct some of the problems. He said all of the employees of the CIP department that were involved in the projects are no longer with the district. That would include Manning.
Johnson said he knew nothing about Tuesday’s suggestion of peer review or how it was placed on the agenda.
“I cannot be transparent if I don’t know information,” Johnson said.
Other trustees who are not members of the audit committee attended the meeting anyway and asked questions.
Joyce Foreman said she was unaware of any past use of peer review to scrutinize auditors.
“I want us to go after the bad guys. We are responsible for the taxpayers’ money,” Foreman said.
At Dallas ISD, the chief internal auditor reports directly to trustees, just as the district superintendent does.
Trustee Miguel Solis said he had never heard concerns from Martin before the auditor’s appearance at Tuesday’s meeting.
“Which is probably one of the most unprofessional acts that I’ve ever seen in my seven years on the school board,” Solis said.
Trustees met behind closed doors in executive session for several hours Tuesday and took no final vote on the peer review item.
Later, they heard a briefing on plans for the bond referendum which could appear on the ballot in the Nov. 12 election.