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Sussex Technical School District Inspection

Date Posted: Thursday, June 8th, 2017
Categories:  Auditor of Accounts

The Office of Auditor of Accounts (AOA) received an anonymous complaint that Mr. Michael Horsey of Laurel, DE, purchased a piece of land and then sold it for a high price to Sussex Technical School District (Sussex Tech). Sussex Tech then awarded the Construction Manager (CM) contract for the High School Bus Entrance project to Common Sense Solutions, LLC (CSS), a business owned by Mr. Horsey.

AOA examined land transaction documents provided by Sussex Tech and Sussex County land records. Governmental Services, LLC, a business owned by Mr. Horsey, purchased the land parcel Sussex Tech needed for the High School Bus Entrance project for $110,000 and sold it to Sussex Tech two weeks later for $200,000. In addition, AOA obtained documentation proving that Mr. Horsey had prior knowledge of Sussex Tech’s need for the land parcel. CSS, another business owned by Mr. Horsey, was subsequently awarded the CM contract for the High School Bus Entrance project for $205,699.

During our review, Sussex Tech awarded CSS additional CM contracts for other construction projects by way of “piggybacking” from the existing High School Bus Entrance CM contract. AOA expanded the scope of this inspection to include review of these contracts and other payments to CSS. AOA reviewed $3,873,431 in expenditures paid to CSS for the period July 1, 2011 through November 4, 2016.

AOA’s review of payments to CSS identified an overall lack of support for invoices, numerous State of Delaware Budget and Accounting Policy Manual violations, avoidance of fair procurement processes, and conflicts of interest. In an effort to avoid oversight by the State, AOA identified 105 payment vouchers with a total dollar amount of $929,682 that appeared to be split in order to stay below the thresholds requiring purchase orders, three letter bids, and competitive bidding.

In addition, the former Director of Facilities retired from Sussex Tech on July 1, 2015 and was subsequently employed by CSS as the project coordinator and liaison for Sussex Tech projects. These projects were the same contracts he awarded to CSS and managed when employed by Sussex Tech.

Throughout the course of this inspection, Sussex Tech lacked appropriate scrutiny of transactions and enforcement of fiscal policies and procedures. The School Board entrusted Sussex Tech administration to make decisions regarding the construction projects without the School Board’s involvement which created a lack of accountability. These practices and violations are still occurring as of the release of this report, and CSS continues to gain additional contracts from Sussex Tech.

For the full results of the inspection, please see the report.

If you have any questions, please contact R. Thomas Wagner, State Auditor, at 302-739-5055 or r.thomas.wagner@state.de.us.


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