Oklahoma State Auditor and Inspector Cindy Byrd released the second part of a special audit of Tulsa Public Schools on Tuesday, detailing what she called fraud, misappropriation and improper payments totaling $3.7 million.
The audit found evidence that former TPS Executive Director of Bond and Energy Management Chris Hudgins used his position to divert millions of dollars in taxpayer money to his personal company and direct contracts to preferred vendors.
Byrd said Hudgins operated a personal business out of TPS offices for more than 10 years, starting in 2014, while having access to and authority over tens of millions of dollars in taxpayer funds.
Millions paid to personal company
According to the audit, Tulsa engineering firm Allied Engineering paid $2.6 million to M&G Consulting, Hudgins’ personal company, for architectural services.
The payments included about $1 million for roofing, $1 million for interior renovations and more than $600,000 for HVAC work.
The audit found the services were never delivered.
Allied also received more than $58,000 in fees for processing false invoices related to the roofing contract.
In June, charges were filed against Hudgins and two Allied Engineering partners in connection with an alleged attempt to defraud TPS of $779,000.
Improper rebate payments
The audit also found Hudgins authorized GLD Consulting to administer TPS’ PSO rebate process without School Board approval.
GLD was formed by three Allied employees and retained 30% of the TPS rebate, totaling $547,782.
Auditors also found Allied used an improper billing method that increased its compensation and resulted in at least $499,573 in overpayments.
Lack of board oversight
The audit found the TPS School Board approved payments based on Hudgins’ recommendations without reviewing project contracts and amendments.
Byrd said the findings show the need for stronger oversight of public money.
“It appears Hudgins had free rein over the bond department and the TPS School Board rubber-stamped almost every recommendation he made,” Byrd said.
The governor initially requested the investigation and later approved its continuation following findings from the first TPS audit released last year.
Byrd said government employees should not have unilateral control over public finances and that stronger oversight is needed to prevent taxpayer money from being wasted.
Attorneys for Chris Hudgins respond to audit release
“Chris Hudgins is presumed innocent, and he maintains his innocence. An audit is a collection of one-sided allegations assembled without the testing of cross-examination. It is not evidence, and it is not a verdict. We will respond to the State’s claims where they belong, in a courtroom. We ask the public to withhold judgment and let the process work.”
Current Tulsa Public Schools administration responds
The district’s present administration, with Dr. Ebony Johnson as superintendent, responded to the new findings. The district says it is grateful to the state auditor and her team for their exhaustive investigation into past wrongdoing related to fraud perpetrated against the district. It says it intends to pursue all legal remedies to receive full restitution in this matter.
“We have cooperated fully with the state auditor and her team and heeded all guidance offered to us by law enforcement throughout this investigation, including the addition of safeguards to ensure the district has more transparency in its financial reporting protocols,” Dr. Ebony Johnson, Tulsa Public Schools Superintendent, said. “Our students and our school communities deserve every dollar meant for them. We intend to fight to ensure the district is made whole and remain fully committed to supporting all relevant agencies pursuing justice in this matter.”
Oklahoma’s Attorney General releases updated statement
Attorney General Gentner Drummond says the audit released Tuesday builds on the investigation that led to criminal charges filed in June against former TPS administrator Chris Hudgins and two associates.
Drummond issued the following statement:
“This audit confirms what our June charges already made clear – bond dollars meant to repair and improve Tulsa schools were instead treated as someone’s personal piggy bank. I thank Auditor Byrd and her staff for their diligence in building out this record. My office is reviewing the full audit now, and we are not finished. Additional charges are on the table,’ Drummond said.
Tulsa County District Attorney releases updated statement
The district attorney’s office says it is reviewing the findings of the updated audit.
“We received this report at the same time it was released to the public. We are in the process of reviewing the information and findings of the State Auditor. Beyond that, we are not in a position to comment about investigative matters which may be underway,” Tulsa County District Attorney Steve Kunzweiler said.
This article was originally published by KOTV (News on 6). You can see the original story here.