BISD AUDIT NAMES NAMES: JOE RODRIGUEZ, TONY FULLER, GOMEZ MENDEZ/SAENZ, ET AL

Part II

(On September 2011 the trustees agreed to hire the Dallas forensic auditing firm of Defenbaugh & Associates to complete a forensic audit within 120 days. The audit covered the 2008-2009, 2009-2010 and 2010-2011 school years and cost $250,000. In this part, the auditors examine the role former A.D. Joe Rodriguez, former CFO Tony Fuller and others played vis-a-vis the district's finances during that time.)

By Juan Montoya

1. Joe Rodriguez matter relating to affiliation with BISD's substantial purchasing activity from BNS Sports

FINDINGS AND RECOMMENDATIONS:

The role Joe Rodriguez in the procurement of sports equipment after he left the district was also examined by the forensic auditors. In a section devoted entirely to his business dealings with the district through his longtime protege (and now A.D.) Tom Chavez, they wrote that they investigated allegations of Rodriguez used undue influence to do business with the BISD.

There was entirely no mention of the audits performed by BISD on his scholarship fund-activity using his nonprofit where a

llegations that district, state, and federal laws may have been violated.

Initial allegations Joe Rodriguez was using undue influence and coercive tactics to pressure BISD coaches, athletic coordinators, and athletic personnel to purchaser sports uniforms and equipment from a company, BNS Sports, Rordriguez became a sales representative for after he left BISD in Dec. 31, 2009.

In addition, Rodriguez in a telephone call made to Margarita Pizano-Flores in Sept. 2011 threatened to sue BISD because the Purchasing Department had changed and improved the Catalog/Co-op procurement process.

Investigation and analysis subsequently revealed that a substantial amount of payments of uniforms and equipment totaling $497,117 in fiscal year 2010-2011 was completed compared to the previous fiscal years (2009-2010) total of $175,715; an increase of 283 percent.

Interviews identified most of the purchasing was made by the athletic department, in general, and by Tom Chavez, in particular. Chavez, an admitted close friend with Rodriguez for over 30 years, succeeded Rodriguez after he left BISD.

Record review of purchase orders also support the fact that the athletic department fulfilled most of those purcha

ses, predominantly for Manzano Middle School and Veterans Memorial High School, both newly constructed schools, with no prior uniforms or equipment. Although Chavez denied giving preferential treatment to BNS and/or Joe Rodriguez in the purchasing process for both schools, Chavez never gave any due consideration to at least three other approved vendors sports distributors.

At the beginning of September 2011, BISD's Purchasing Department changed the Catalog/Co-op procurement procedure shifting control of catalog procurement process from the end-user, Athletic Department, to the Purchasing Department. This change provided more internal control and was the apparent reason for Rodriguez's telephone call to Lead Auditor Margarita Pizan0-Flores after the realization that BNS would have to be more competitive in terms of price.

Shortly thereafter the other sales representative at BNS informed the Purchasing Department that a 10 percent discount would be rendered on BNS catalog items.

It is the opinion of the Forensic Audit Staff that no doubt the Athletic Department in general and Tom Chavez in particular exercised undue influence and misuse of authority in choosing BNS Sports, through their sales rep. Joe Rodriguez, particularly in the purchasing of uniforms and other sports supplies for Manzano Middle School and Veterans Memorial High School in school year 2010-2011.

(This) resulted in close to $500,000 of purchases being given to Chavez's close friend and former A.D. Joe Rodriguez. Chavez allowed he and Joe Rodriguez's personal relationship to interfere with what should have been a business decision causing a potential loss of revenue to be sustained by the district.

The Forensic Audit Staff recommended that a no-solicitation clause be included in future employment contr

acts and that BISD make a determination with respect to a (vendor such as BNS) whose representative (Joe Rodriguez) issue a threat over the telephone to file a lawsuit against the district.

It is the opinion of the (auditors) that Chavez and his AD staff afforded BNS preferential treatment to the detriment of the district. Consideration should be given to administrative action disciplining Tom Chavez with termination as a consideration.

2. Design services for the science laboratory grant program new labs at Hanna and Porter high schools.

FINDINGS AND RECOMMENDATIONS:

Former Chief Financial Officer Fred Anthony "Tony" Fuller, in spite of direct written instructions from the BISD board, transferred funds in the amount of $47,689 in an unauthorized manner.

(Fuller) authorized processing payments out of the Local Maintenance Fund instead of the Science Laboratory Grant Program to the architectural contractor Gomez Mendez/Saenz Inc. These actions were c

ompleted knowingly and without authorization in direct violation of the board's direction and the Texas Education Code for failure to comply with budget requirements, Class C misdemeanor.

We recommend that the resolution of Fuller's contract status be expeditiously handled. As of this writing, he has been suspended with pay for four months.

3. Veterans Memorial High School construction cost overrun

FINDINGS AND CO

NCLUSIONS:

Veterans Memorial High School was originally planned to cost the district $50 million. When Veterans Memorial High School planning began, the selected Architectural Design firm of Gomez Mendez/Saenz Inc. projected an original contract sum of $62,4513,000 for the complete project base bid. The general contractor D. Wilson Construction Company, estimated the base bid just for their portion of the project to be $60,579,000. The underlying differences in costs led the project from being significantly over budget to a project that was greatly over budget. (At the time Superintendent Hector) Gonzalez argued for having no consultant, since the architectural designers were receiving $2.8 million for project construction and supervision. He stated that the three owners of the selected firm, Gomez Mendez/Saenz had promised him they would provide a full-time person for the job and that person would be on-site.

Reliance on a project manager from the architectural firm is a practice that should be discontinued. There is no vested interest in successfully completing the project, other than payment for the services rendered.

Strong recommendation should be made that Gomez Mendez/Saenz Inc. should be prevented from bidding due to their lack of attention to the Veterans Memorial High School project.

(Next: The role of BISD's financial consultants in the $25.9 million bond fiasco)