NEWS 8 EXCLUSIVE
DALLAS -- One Dallas Independent School District insider is calling it a "disturbing" lack of financial controls.
The alleged lack of controls is prompting an internal investigation into the possible improper purchase and disappearance of millions of dollars of technology equipment at Dallas ISD.
The red flags were raised at a board meeting last month. Two technology purchases were being questioned and held up. One for nearly $9 million, the other for $765,000.
Both items were "pulled from the agenda by administration" at the June 26 board meeting. According to DISD Superintendent Mike Miles it was "based on upon the recommendation of Mike Singleton, Chief of Internal Audit."
So why would auditors be interested?
Sources tell News 8 questions have arisen about loose financial controls in the technology department dating back to 2006. The nearly $10 million in technology-related equipment purchases had been made without board approval.
DISD officials say internal controls have since been strengthened to prevent similar mistakes. District policy says “Board action is necessary for all purchases of $50,000 or more."
At a board meeting on June 12, Trustee Bernadette Nutall asked DISD's purchasing director, Kimi Tate, whether certain payments were even allowable.
The exchange went as follows:
"Did these check requests go through procurement?” Nutall asked.
“No ma'am,” Tate replied.
Nutall then responded, “So, I thought that when we had a contract that we had to write a check, and that's when our controls are in place and say, 'Hey guys, we don't have a contract, you can’t write a check for this.'"
Sources say Tate discovered the errors and brought them to the attention of internal investigators. Sources also tell News 8 DISD auditors are investigating the possible disappearance of up to $3 million in technology-related equipment that was purchased.
In 2009, the federal government fined DISD $750,000 for violating federal purchasing rules and froze future payments, costing the district tens of millions of dollars. If auditors discover additional purchasing violations, it could again spell fines and the loss of millions of dollars for DISD.
The investigation is just now underway.
DISD officials say they are not concerned the audit will turn up anything of substance, except the missing equipment, which they believe will be located and properly accounted for.