Adams 14 school district on Thursday released the results of a financial report it conducted last year after concerns that its state-ordered manager was having the district pay subcontractors to do work the company was already paid to do.
The report — which examined contracts with eight vendors totaling $495,486.18 — has been at the center of the dispute between Adams 14 and MGT Consulting. Members of the Colorado State Board of Education have said that without the results of the financial audit they can’t determine whether the district had cause to end its partnership with the company earlier this year.
Accounting firm Eide Bailly found that all but one contract provided services similar to those set in the district’s management agreement and it also reported multiple instances of Adams 14 either paying a vendor more than agreed upon or an amount above its $25,000 contract approval threshold.
“An independent forensic audit has shown actions on the part of this company that cannot be construed in any way as reflecting the best interest of the Adams 14 and Commerce City community and its students as well as our educators,” said Robert Lundin, executive director of communications for the district, during a press conference.
The report does not provide an opinion on the contracts it examined, including whether any laws were violated. School board President Ramona Lewis also said the 17th Judicial District Attorney’s Office declined to pursue criminal charges. The district gave the report to the district attorney’s office after it was completed.
“We will broaden our investigation to all contracts engaged in by (MGT Consulting) during the two and a half years they managed the district,” she said “Superintendent (Karla) Loria and the board will continue with our work to turn this district around.”
The state placed Adams 14 under the external management agreement in 2018 after years of low test scores and high dropout rates. The school district, based in Commerce City, has about 6,000 students.
The forensic accounting report was completed on Nov. 12 by Eide Bailly and examined contracts and payments made between July 2018 and August 2021.
Among the contracts looked at were five with 2Partner Mathematics Consulting, which provides coaching and professional development to school districts. The report said the services “appear(ed) similar” to those set in the management agreement. Two of those contracts — one that cost $53,000 and another $48,500 — also exceeded Adams 14’s contract approval threshold of $25,000.
In another case, Adams 14 entered into a contract with Jackie Webb Educational Consulting, which provided consulting on writing grant applications, in 2019 to pay $1,500 per day for three days of services with payments not to exceed $4,500. But the district made two additional payments totaling $15,800 in 2021 to the company. Eide Bailly did not find the services to be duplicative with MGT Consulting’s work.
Officials with MGT Consulting said they did not receive a copy of the report until 20 minutes before the district’s 10 a.m. press conference. The company said neither district finance employees nor other staff with MGT Consulting were interviewed for the report and alleged the results were altered to “meet the district’s narrative.”
“Today’s press conference is the latest in a series of charades from Adams 14,” said Eric Parish, executive vice president of MGT Consulting, in a statement, adding, ” This is all part of an effort to distract from the state review panel’s report next month, and the local board’s history of underperformance.”
MGT Consulting stopped working in the district earlier this month. The decision came after the district’s school board voted in January to end its contract with MGT in April. And later last month, the Colorado State Board of Education denied the district’s request to select a new manager.
The relationship between the district and MGT Consulting became increasingly strained starting late last year.
MGT Consulting told Adams 14 in November that an attorney was investigating complaints that at least one employee interfered with the results of the audit. The district sued the company two months later for allegedly violating the state’s public records law by not handing over documents related to the investigation.
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