Audit aftermath: Sussex Tech board places senior administrators on paid leave

GEORGETOWN – Sussex Technical School District’s board of education earlier this week placed senior administrators on paid leave following a critical state audit report on the district’s dealings with a local businessman.

The school district’s prepared statement reads the “board of education voted on June 12, 2017 to place senior administrators on administrative leave with pay pending the outcome of an investigation into matters raised in the Auditor of Accounts’ report issued June 9, 2017.”

Dr. John Sell

Dr. John Demby

“In the interim, John Demby and John Sell have officially been entrusted to run day to day district affairs.  No further details will be provided in order to protect the privacy of personnel,” the statement reads.

Dr. Demby is Sussex Tech High School principal; Dr. Sell is an assistant principal.

State Sen. Gerald Hocker said he was informed Monday, June 12 by a member of Sussex Tech’s board of education that three administrators were placed on leave following State Auditor R. Thomas Wagner’s presentation on the audit report findings to the school board.

“I don’t know a whole lot of the details; I was not there,” Sen. Hocker said. “I did get a call that there were three administrators that they put on administrative leave with pay last night (June 12).”

The audit, released June 8, identified piggybacking, conflict of interest and overall circumvention in land purchase and contractual dealings between the Sussex Technical School District and local businessman Michael Horsey.

“It basically was a circumvention of the system,” said Mr. Wagner.

Downstate legislators responded quickly to the audit report, saying in a joint statement the report released June 8 by the State Auditor of Accounts “raises some troubling questions about Sussex Tech.”

Investigation by the State Auditor of Accounts was triggered in July of 2014 by an anonymous complaint that Michael Horsey of Laurel had purchased a piece of land and then sold it for a much higher price to the Sussex Technical School District.

“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,” the audit report states. “In addition, AOA obtained documentation proving that Mr. Horsey had prior knowledge of Sussex Tech’s need for the land parcel.  CSS (Common Sense Solutions LLC), another business owned by Mr. Horsey, was subsequently awarded the CM (construction manager) contract for the high school bus entrance project for $205,699.”

According to the AOA report, Common Senses Solutions turned their original bus entrance contract of $205,699 into nearly $4 million in payments by piggybacking the high school HVAC systems, high school instructional shops and district office renovations projects onto the original construction manager contract with Sussex Tech “as well as providing other services to the district that were not subject to any contract or required state approvals.”

The audit report states that “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.”

“The way they purchased the land is not how you are allowed to purchase land. You’ve got to have an appraisal on the land and then the state is the one that usually makes the proposal to purchase. In this case it was just, ‘Here, we’ll sell you this for $200,000,” said Mr. Wagner. “Then you had some of the bidding … how they handled that was just flat out unacceptable or were very questionable at best. Then they broke up purchase orders. The rationale for that is anything over $5,000 has a state review, and everything over $10,000 has a higher level of review. So, you are breaking those up just so somebody else isn’t looking at them.”

The audit report also found the former Sussex Tech Director of Facilities (Terry Little) 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,” according to the audit report.

Sussex Tech, in its response to the findings that were included in the AOA report, stated: “Sussex Technical School District is currently attempting to improve both process and procedure as it pertains to the appropriate scrutiny of transactions and enforcement of fiscal policies. Decreases in personnel over the years has led to many individuals wearing various hats and/or splitting job duties; this has presented challenges as all were learning and continue to learn their role and responsibilities. Sussex Technical School District will continue to do the best job possible while serving our community. All input will be synthesized and assist with our efforts moving forward. As of June 30, 2017, the contract with Common Sense Solutions (CSS) will come to an end. There are no further plans to utilize CSS’s Construction Management services beyond that point.”

“Through various interviews with employees at Sussex Tech, it has been stated that each time someone began questioning the payments made to CSS, they were pushed out of the decision-making and payment approval process,” the audit report states.

State Sen. Gerald Hocker was keynote speaker at Sussex Tech High School’s 2017 graduation.

Sen. Hocker, who recently served a keynote commencement speaker at Sussex Tech’s 2017 graduation, sad he was very interested in this matter.

“You know, sitting on the Bond Bill I pushed for Sussex Tech to get the money to do the remodeling that they did that was really needed. It was disgraceful, the environment that some of the students had to work in,” said Sen. Hocker. “The work that was done there was great; I don’t agree with how it got there. But I wish that the administration of Sussex Tech would open up and tell us the other side of the story …”

“I honestly think the board did exactly what they had to do, to get to the bottom of this and save face,” added Sen. Hocker. “I think they did what they had to do.”

News Editor Glenn Rolfe can be reached at grolfe@newszap.com

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