Almost $500,000 in payments to a BESE contractor may have violated state rules, an investigation by the Legislative Auditor found.
The investigative audit was conducted at the request of BESE and the state superintendent - but only after several media outlets reported on the questionable payments.
"In November 2021, several media outlets reported that the Louisiana Department of Education (DOE) entered into two separate “no-bid” contracts with Invicta Consulting, LLC between September and October 2021. According to these media reports, one contract was approved by BESE in October 2021; however, the second contract was in effect for nearly two months before then-BESE President Sandy Holloway was made aware of the contract," a summary of the audit states.
The chair of BESE requested that an audit be done 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 issued payments to contractors on two contracts without first obtaining BESE approval.
From May 21, 2021 to November 9, 2021, DOE paid $486,050 on two emergency contracts without first obtaining the Louisiana Board of Elementary and Secondary Education’s (BESE’s) approval. The Louisiana Administrative Code requires that professional and consulting services contracts recommended by the Superintendent of Education at, or above, a certain amount (currently $50,000) be approved by BESE. By paying contractors for professional and consulting services prior to obtaining BESE’s approval, DOE may have violated a provision of the Louisiana Administrative Code, auditors say.
DOE's lawyer says the emergency COVID proclamations mean they didn't have to get BESE approval on the contractors.
The auditors recommend that DOE and BESE get together 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 under emergencies.
Auditors say that BESE is authorized to enter into contracts and agreements that have been recommended by the Superintendent with public and private agencies. According to the Louisiana Administrative Code, entities under BESE’s jurisdiction shall negotiate all contracts for professional/consulting services in accordance with BESE policy and all applicable federal and state laws, rules and regulations.
The Superintendent can negotiate and approve contracts for professional/consulting services in an amount determined by BESE (currently up to, but not including, $50,000) and shall issue a report to the BESE on all contracts he approves. All professional and/or consulting services contracts recommended by the Superintendent for $50,000 and above require BESE approval, the audit states.
The Louisiana Procurement Code does not require a competitive process for professional service contracts, but does require one for consulting services costing $75,000 or more, the audit states.
State law requires that consulting service contracts equal to or in excess of $75,000 be awarded through a request for proposals or reverse auction process under the rules and regulations issued by the Office of State Procurement (OSP). DOE personnel informed auditors that these contracts are drafted, then signed by the contractor and the Superintendent and/or the Assistant Superintendent or Chief of Staff. The contract is considered executed once signed and uploaded to OSP’s contracts system for OSP review and approval.
DOE personnel also said that OSP’s review and approval process can take anywhere from four to eight weeks, depending on whether corrections or additional information is needed. After the contract is approved by OSP, a purchase order is generated, which allows DOE to make contract payments. The contract is typically presented to BESE for approval at its next scheduled meeting. According to DOE personnel, this process is utilized to ensure that all required state laws, policies and procedures have been followed prior to obtaining BESE’s approval. DOE personnel further informed us that this has been a longstanding practice that was utilized by prior administrations.
According to auditors, when the governor issued an emergency proclamation in March 2020 for COVID, that suspended the procurement code requirements. It did not, however, suspend BESE's rule to require BESE approval for any contracts worth more than $50,000, the audit states.
DOE's lawyer did provide auditors with her written opinion, in which she states that this approval was not required and DOE did nothing wrong.
Auditors found that two consulting contracts were executed and hundreds of thousands of tax dollars were paid to the contractors, prior to BESE approval.
One, with Postlethwaite & Netterville, was done to help with the administration of the Louisiana Emergency Assistance to Non-Public Schools Program to provide services or assistance to eligible nonpublic schools to address the impact that COVID-19 had, and continues to have, on non-public schools, students and teachers in the state of Louisiana. The contract period began on February 1, 2021, and ended on December 31, 2021, with a contract maximum of $1,950,000. Invoices totaling $426,050, for services performed from February 1, 2021 to April 15, 2021. Both invoices were paid by DOE on May 21, 2021; however, BESE minutes show BESE did not approve the contract until June 16, 2021, auditors found.
The second, with Invicta Consulting, LLC was done to 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 to begin September 13. The first installment on the contract, for $60,000, was made in November 2021. As of the date of the audit, BESE still has not approved that contract, the audit states.
