From a Washington state auditor’s release about an audit of Seattle Public Schools.

The Washington State Auditor concluded an investigation into Seattle Public Schools construction program small contracts from 2006 to 2009 and found a lack of employee oversight, operation outside normal accountability channels, failure of internal controls, and lack of an adequate means for employees to raise their concerns.

The District asked the State Auditor last fall to conduct an investigation after the King County Prosecutor’s office advised the District of additional potential illegal activity by a former employee. District adopted corrective measures to address the issues in this new report, so no new procedures or corrective measures will need to be adopted as a result of this review

“The School District asked the State Auditor’s Office for this investigation, and we respect the findings,” said Sherry Carr, School Board Director of Chair of the Audit and Finance Committee. “In the past 18 months, the School Board has worked hard to strengthen internal controls and oversight. Through governance measures and partnerships, we are raising the bar with respect to ethical behavior at the District and are creating strong checks and balances for accounting.

In the summer of 2010, SPS asked the Washington State Auditor to investigate issues surrounding the Regional Small Business Development Program. The District paid for that investigation, which resulted in audit findings released in the State Auditor’s Office Special Investigation Report on Feb. 23, 2011. The School Board also asked for an independent investigation, and that report by Patricia Eakes was released on Feb. 25, 2011.

The original investigation was primarily focused on the Regional Small Business Development Program itself and the recruiters and trainers and did not examine the small construction contracts prior to 2009. Once it became apparent that there may have been issues with the construction contracts, the District asked for a second investigation. This second investigation focused on small works construction contracts – those contracts that do not exceed $200,000 – issued from 2006 to 2009.

The Regional Small Business Development Program was eliminated in Spring 2010. All of the management leaders to whom former employee Silas Potter reported are no longer employed by Seattle Public Schools.