Nearly $500,000 in payments to a BESE contractor may have violated state rules, a legislative auditor investigation has found.
The investigative audit was conducted at the request of the BESE and the state superintendent – but only after multiple media outlets reported on the questionable payments.
“In November 2021, multiple news outlets reported that the Louisiana Department of Education (DOE) entered into two separate ‘no-tender’ contracts with Invicta Consulting, LLC between September and October 2021. According to those outlets, a contract was approved by BESE in October 2021; however, the second contract had been in effect for almost two months before then-BESE President Sandy Holloway was made aware of the contract,” a summary of auditing.
The BESE Chairman requested that an audit be performed on all DOE emergency contracts issued under the COVID proclamation, and a day later the state superintendent requested an audit of the procedures used to issue contracts under the proclamation.
The audit found that the Louisiana Department of Education made payments to contractors on two contracts without first obtaining BESE approval.
From May 21, 2021 to November 9, 2021, the DOE paid $486,050 on two emergency contracts without first obtaining approval from the Louisiana Board of Elementary and Secondary Education (BESE). Louisiana’s administrative code requires that contracts for professional and consulting services recommended by the Superintendent of Education at a certain amount or more (currently $50,000) must be approved by the BESE. By paying contractors for professional and consulting services before obtaining BESE approval, the DOE may have violated a provision of Louisiana’s Administrative Code, the auditors say.
The DOE attorney says the emergency COVID proclamations mean they didn’t have to get BESE approval for contractors.
The auditors recommend that the DOE and BESE meet and develop written policies and procedures to ensure that BESE approval is obtained for all contracts that require it, and that the policies address what happens. in case of emergency.
Auditors say BESE is authorized to enter into contracts and agreements that have been recommended by the Superintendent with public and private bodies. According to the Louisiana Administrative Code, entities under BESE’s jurisdiction must negotiate all contracts for professional/consulting services in accordance with BESE’s policy and all applicable federal and state laws, rules and regulations.
The Superintendent may negotiate and approve contracts for professional/consulting services in an amount determined by the BESE (currently up to $50,000, but not included) and must issue a report to the BESE on all contracts he approved. All superintendent-recommended professional services and/or consulting contracts for $50,000 and above require BESE approval, the audit said.
The Louisiana Procurement Code does not require a competitive process for professional services contracts, but does require one for consulting services costing $75,000 or more, the audit said.
State law requires that contracts for consulting services equal to or greater than $75,000 be awarded through a request for proposals or reverse auction process in accordance with rules and regulations issued by the Office of State Procurement (OSP). DOE staff informed the auditors that these contracts are drafted and then signed by the contractor and the superintendent and/or deputy superintendent or chief of staff. The contract is considered executed once signed and uploaded to OSP’s contract system for OSP’s review and approval.
DOE staff also said the OSP review and approval process can take four to eight weeks, depending on whether corrections or additional information is needed. Once the contract is approved by the OSP, a purchase order is generated, which allows the DOE to make the contract payments. The contract is usually presented to the BESE for approval at its next scheduled meeting. According to DOE staff, this process is used to ensure that all required state laws, policies, and procedures have been followed prior to obtaining BESE approval. DOE staff further informed us that this was a longstanding practice used by previous administrations.
According to the auditors, when the governor issued an emergency proclamation in March 2020 for COVID, it suspended the procurement code requirements. It did not, however, suspend BESE’s rule to require BESE’s approval for any contract worth more than $50,000, the audit said.
The DOE’s attorney provided the auditors with her written opinion, in which she states that this approval was not required and that the DOE did nothing wrong.
Auditors found that two consultancy contracts had been executed and that hundreds of thousands of dollars in taxes had been paid to the contractors, before the approval of the BESE.
One, with Postlethwaite & Netterville, was conducted to assist in the administration of Louisiana’s Emergency Assistance Program for Nonpublic Schools to provide services or assistance to eligible nonpublic schools to deal with the impact that COVID-19 has had and continues to have on nonpublic schools, students, and teachers in the state of Louisiana. The contract period started on February 1, 2021 and ended on December 31, 2021, with a maximum contract of $1,950,000. Invoices totaling $426,050, for services rendered from February 1, 2021 to April 15, 2021. Both invoices were paid by the DOE on May 21, 2021; however, BESE minutes show that BESE did not approve the contract until June 16, 2021, auditors found.
The second, with Invicta Consulting, LLC, was conducted to design, implement, and manage a comprehensive review process for academic recovery and acceleration plans submitted by school districts.
The contract was executed in September 2021 and was scheduled to start on September 13. The first installment of the contract, in the amount of $60,000, was made in November 2021. As of the date of the audit, BESE has still not approved this contract, the audit indicates.