Release of Broken Arrow schools audit nears, law firm’s role questioned
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Published: 01-Sep-2010

By Patrick B. McGuigan

Published: 01-Sep-2010

A second “exit interview” for members of the Broken Arrow Board of Education, ending late yesterday afternoon, again included the troubled district’s controversial law firm. Sessions for the board were conducted by investigators from the office of state Auditor & Inspector Steve Burrage.

Earlier this week, Broken Arrow Schools Superintendent Jarod Mendenhall announced a special board meeting on Thursday, September 2, at 5 p.m. At that time, the auditor’s office intends to release the final version of the state’s audit, ending a process that began in early 2009.

However, release of the audit will not end controversy and troubles for the school system. The Broken Arrow scandal has continued to accelerate in the past week, driven by multiple disclosures, including the start of a criminal investigative audit and circulation of an early draft of the audit. Sources say local, state and federal law enforcement officials are investigating the district’s governance, finances and other issues.

Additionally, CapitolBeatOK has learned that Broken Arrow School Board member Terry Stover raised, in a communication to a member of the auditor’s staff, serious concerns about involvement of the district’s law firm, Rosenstein, Fist & Ringold, in the exit interviews and the audit process.

Some critics of both the audit process and of the school district’s management believe the involvement of the law firm was unnecessary in terms of the exit interviews, especially in light of the firm's apparent involvement in some matters audited.

These sources question why the law firm was included in the first and second exit interviews, while the general public was excluded.

In response to a question from CapitolBeatOK, spokesman Trey Davis of Auditor Burrage’s staff characterized Tuesday’s exit interviews as responsive to the district’s requests. He noted that Broken Arrow schools “requested a second exit conference regarding the findings in the special audit and we extended the offer to accommodate that request.”

Present at Tuesday’s meeting in Broken Arrow were Deputy State Auditor Michelle Day, Ricky Branch of the auditor’s staff, members of the School Board and Superintendent Mendenhall. Also present was Doug Mann, a leading player at the controversial Rosenstein, Fist & Ringold law firm. Two sessions were held with two board members, while a third session involved only one board member.

In response to CapitolBeatOK’s questions about Mann’s involvement for the law firm, Davis explained, “it isn’t unprecedented for a public entity’s legal counsel to be present at an exit conference.” Specifically, he noted that legal counsel for the Department of Public Safety was present at a recent exit conference touching that agency. Similarly, legal counsel for Cleveland County attended exit conferences regarding that jurisdiction’s financial audit.

Davis continued, “The Broken Arrow school district, upon receiving a Taxpayer Notice Letter, requested the special audit which will be released this Thursday [September 2]. State law requires that we share the audit’s findings with the school board and superintendent and withhold its public release for 14 days following the exit conference.”

The client for the present audit is the Broken Arrow public school district’s board of education. Davis said, “In presenting our findings, we met with our clients as required by law. We were prohibited from meeting in either open or executive session to present the findings so the general public was necessarily excluded to ensure compliance.”

The board has an attorney/client relationship with the Rosenstein, Fist & Ringold firm. Davis said, the firm “representing the board, were present at the request of its client.” Davis had observed in previous interview with CapitolBeat OK that “any board member could have requested the attorney be excluded when meeting with our office to review the audit findings.”

This week, Attorney General Drew Edmondson directed a criminal investigative audit be conducted to explore allegations of criminal wrongdoing in the district’s governance. CapitolBeatOK asked Davis if the auditor’s office is allowed to “follow the evidence" when doing audits -- i.e. if criminal wrongdoing is found or suspected, can that be pursued as part of that audit, or is there a limit on the agency’s scope in audits?

Davis explained, “the scope of an audit is initially determined by the client, in this case, Broken Arrow Public Schools. The allegations contained in the Taxpayer Notice Letter served as the basis for the scope of the audit.”

Ricky Branch, a director in the auditor’s office, worked with former Superintendent Gary Gerber “to determine the audit’s objectives. Broken Arrow Public Schools selected on an almost three-year period for the audit,” Davis told CapitolBeatOK.

Davis continued, “During the course of an auditor’s field work, the initial goal is to identify those records and other documents responsive to a specific objective. An auditor is not prohibited from going outside the scope of the audit if his or her review and analysis of available documents and/or interviews or conversations warrant it. The auditor may also review records or documents outside the timeline of the audit if it is relevant.”

Davis concluded, “We are not authorized, however, to audit private businesses or individuals or to obtain private records of individuals or records from private businesses. The attorney general or a district attorney have police powers which extend beyond the authority of this office. The prohibitions which restrict our investigative efforts to public sector entities and employees do not apply” to the state Attorney General or the local District Attorney.

CapitolBeatOK will be exploring other aspects of the Broken Arrow school controversy in subsequent stories.

 


 

 

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