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State Auditor: Seattle School District Wasted Up To $1.8 Million

Phyllis Fletcher
02/23/2011

The Seattle School District has wasted up to $1.8 million — on contract work that either didn't happen, or had no benefit to Seattle Public Schools. That's the word today (Wednesday) from the Washington state auditor. KUOW's Phyllis Fletcher reports.

TRANSCRIPT

The state auditor is Brian Sonntag. He calls this one of the worst examples of fraud he's seen in 18 years on the job.

I asked him: should it be investigated as a crime?

Sonntag: "In my opinion, yes. I think there certainly are at least questionable activities, and it needs to be examined, get those issues fully looked at and ferreted out and see where it goes from there."

Last summer, the district told Sonntag's office about a questionable transaction. A deposit of $35,000 that should have gone to the district, but went into the bank account of a district employee first. It turned out to be part of a pattern. The auditor found that the employee who was in charge of a small business development program was getting money from the Seattle district, and other districts, for services that were never performed.

Steve Sundquist is President of the Seattle School Board. He says the district told the auditor about the $35,000 last summer, but that he didn't find out until December. Then —

Sundquist: "We went to the prosecutor's office, the King County prosecutor, to say, you know, the auditor is beginning to uncover something that looks like a potential fraud. We want you to be aware of it, and from a criminal perspective, we think it would be wise for you to investigate."

A spokesperson for the county prosecutor says they are doing that.

The manager of the district's small business program quit. So did his boss and the district's internal auditor, whose job was to catch and expose these things. The audit mentions all three of them — saying they either participated in the scheme to take money from the district, or that they knew about it.

Typically, the Seattle School District and the state auditor release this kind of bad news at a meeting open to the public.

That meeting had been tentatively scheduled for next month. But the State Auditor released his report early, after he learned The Seattle Times already had a copy.

The school board has hired a private investigator to look into the alleged fraud. Her report should come out in a few days.

I'm Phyllis Fletcher, KUOW News.

© Copyright 2011, KUOW

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