Houston Independent School District Superintendent Mike Miles recently revealed that the district did not follow its procurement policies by failing to ask for board approval regarding cooperative purchasing agreements.
Houston ISD Trustee Dani Hernandez described the spending as “astronomical” and “troubling” when she pointed out at the December meeting that the spending was before the board for the first time and had already been allocated.
Miles said that the spending did not exceed its budgeted amounts and that goods and services purchased were approved by the board at the budget level.
According to Houston Landing, 130 purchasing agreements totaling $870 million were signed without board approval. Out of the total amount signed without approval, $200 million in payments have already been made to vendors.
Cooperative agreements can be spread over several years with multiple payments.
In a press conference following the initial announcement, Miles said that during the preparation for the December board meeting the board discovered a breakdown in the purchasing review process. He said that the team responsible for purchasing review incorrectly believed that purchases affiliated with purchasing cooperatives did not require board approval.
“To be clear, there are many steps to the purchasing process, especially cooperative purchases, and they were completed correctly except for the fact that they did not receive board approval.” Miles said.
According to Miles, no laws were broken, the district stayed within budget, and the purchases were disclosed to the board in quarterly reports.
He called the oversight a “good faith error” that must be rectified.
Per Miles, Houston ISD identified “Immediate practice changes to make sure this kind of error does not happen again.”
The district will be adding an attorney to the legal services team to supervise procurement actions and contract approval. The school district will also create a quarterly compliance audit process to ensure that contracts and procurements align with school board policy.
The superintendent said that he will direct district leaders at the director level and above that they are responsible for complying with all board policies that apply to them. He added that the legal services team would send monthly updates with board policy changes.
“In any large organization mistakes are going to be made, we’re just not all perfect,” said Vice President of the Board Ric Campo. He added that he was satisfied with the actions HISD is taking to prevent this from happening again.
When asked if any employees had been fired or disciplined, Miles responded that the process is complex, and that no financial harm to the school district occurred, but that they would review and act accordingly.
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