Report Suggests Law Enforcement May Investigate DCS

Former Interim CFO of Dallas County Schools says law enforcement has contacted him

It appears law enforcement officials may be asking questions about the financial crisis at Dallas County Schools.

NBC 5 Investigates has received a copy of a report, detailing an internal investigation that's already underway at the school bus agency that has been the focus of reports on safety and financial decisions. The report provides a window into that investigation and also suggests Dallas County prosecutors may be asking questions of their own.

DCS hired an investigative agency called the Denshaw Group to help determine whether a full forensic audit is needed at DCS, where questions are swirling about how the agency ended up at risk of running out of money to pay its bills.

At issue is whether the money problems that put DCS on the verge of collapse were caused by financial crimes.

In the report, investigator Dennis Brady writes, "We were hired to conduct a preliminary investigation to determine if there were financial crimes committed regarding a $42 million revenue shortfall in the DCS budget."

The report says, "Our investigation is ongoing but to date has failed to develop evidence of criminal conduct substantial enough to cause DCS a financial problem of this scale."

But report also says, "It is likely that this matter which has received extensive media attention has already been referred to the Dallas County District Attorney's Office for potential further investigation."

The district attorney's office tells NBC 5 Investigates, "...Our office is unable to comment one way or another regarding the existence of an investigation involving this organization."

But Alan King, the man who suggested DCS should launch an internal investigation, tells NBC 5 Investigates law enforcement officials are investigating.

"I cannot comment because I have been contacted by law enforcement and they have asked me not to discuss items in the case," King said.

King would not say which agency contacted him.

King was hired to fix the financial mess at DCS, but then suddenly resigned from his position as interim chief financial officer in February without explanation.

The internal DCS investigator's report suggests King was having difficulty with Superintendent Rick Sorrells, something Sorrells denied on the day King resigned in February.

At the time, Sorrells told NBC 5 Investigates he and King "got along very well."

Sorrells did not return messages NBC 5 Investigates left for him Thursday, and a DCS spokesperson said they were unable to reach Sorrells for comment.

Sorrells stepped down Wednesday, retiring from DCS.

Thursday, the new acting DCS Superintendent Leatha Mullins questioned the credibility of Alan King's statements.

"I have spoken to all of our managers, and no one has any knowledge of a law enforcement investigation," Mullins said in a statement.

"I have told Denshaw to move quickly and present DCS with concrete information, as opposed to speculation. I want all of the information that is available so we can solve these issues and move this agency forward," Mullins's statement continued.

The Denshaw preliminary report says investigators are currently focused on questions about the school bus stop-arm camera program, which put DCS in debt.

So far, the report says eight DCS employees have been interviewed, and computers have been retrieved from four former employees for review.

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