State Auditor Stacey Pickering’s office released the Limited Internal Control and Compliance Review Management Report findings for the Mississippi Department of Education Fiscal Year 2015.
The review included some testing to additional years in order to further understand the processes in place at MDE. The report will reference the appropriate years.
In the first finding the audit found that board oversight should be strengthened. The Mississippi State Board of education is charged with the oversight of the MDE which includes planning, budget, and programs of the department. They recommended that the State Board of Education provide more effective and appropriate oversight of employees of MDE and implement new controls, policies, and procedures.
“We saw a lack of oversight that could potentially lead to fraud, waste, and abuse, as well as it is imperative for the Board of Education to have oversight primarily in making sure funding is reaching the classroom,” said State Auditor Stacey Pickering.
The second finding noted that the MDE should ensure compliance with state law and strengthen internal controls during the procurement process. There are many policies in place during the process of selecting a business for potential contracts with a state agency, internal and external. The audit found that the MDE’s practice of this process has let to waste and abuse of taxpayer funds.
“As detailed below, MDE’s blatant disregard for procurement regulations and laws has resulted in a number of duplicate payments and possible misappropriation of funds and commodities,” said the letter to Superintendent Dr. Carey Wright from MDE.
In light of this, they recommended that the MDE immediately implement new policies to ensure compliance with State law in regards to procurement. This recommendation was made after findings showed MDE was using a POOL method as an alternative procurement method.
This means service providers with similar cost rates and services are listed in a “POOL” and MDE then selects a provider in lieu of receiving three written quotes. This process does not require MDE to request for bids, instead all proctors on the list would receive $100 for proctoring an exam, which eliminates competitive bidding.
The following violations in the approval process were found:
- Research in Action/ J.P. Beaudoin
- DataOne Services LLC/Elton Stokes Jr.
- Dr. John Porter/Blue Sky Innovations LLC
- The Kyles Company
“This is the biggest issue, they had blatant disregard at the Department of Education for the procurement regulations. State statute sets up that the Department of finance and administration establishes all the rules and regulations that we follow when it comes to purchasing contracts and any bidding that takes place,” said Pickering.
In the third finding the audit found that MDE should strengthen internal controls over bank accounts and cash receipts to ensure compliance with state law.
Finding four showed instances were authorization and/or supporting documentation was not properly recorded. The recommendation was made for the MDE to ensure compliance with state law and that receipt of all goods and services and payments should be made within 30 days of receipt of invoice.
The last finding found that during FY2015 MDE did not properly account for all employee personal, major medical and compensatory leave. The recommendation was made to strengthen controls.
MDE responded to the release of the report with the following statement:
“The department of Education has not circumvented any laws. There is nothing against entering into multiple contracts as long as the scope is different. If they happen to fall below a particular threshold that’s not circumventing the system. We bid out the jobs and whatever the jobs come in as, as far as the actual amount within that time frame, that is the amount of the contract that we enter. We have not circumvented any laws,”
Dr. Felicia Gavin the Chief operations officer of the MDE.
However, Gavin said that they have not yet had a chance to read the report to comment directly on the findings.