Now $3 million lost in Seattle Public Schools scandal

The spending scandal that led to the firing of former Seattle School Superintendent Maria Goodloe-Johnson might have been much worse than initially realized.

The State Auditor’s Office identified over $1.5 million in losses and questionable spending last year by the school district’s Regional Small Business Development Program. The program was headed by Silas Potter, Jr. between September of 2005 and August of 2009.

Potter also managed the district’s Small Works Roster Program during that time, which awards contracts worth about $200,000 or less. The initial investigation led the district and the state auditor to begin questioning Potter’s spending in the small works program.

An additional audit released Monday shows they had reason to be concerned. An additional $1.3 million in unnecessary costs have been identified.

“It was surprising that there was no oversight. Certain employees were pretty much given a free hand and there was no adequate record keeping of the expenditures of an awful lot of public money,” says Sontag.

For example, the district paid $127,981 to purchase and install surveillance systems at several high schools, but the equipment never worked. The district was bill $50.74 per hour for janitorial services (the total bill over $83,000) when the prevailing wage for similar work in Washington was about $18 per hour.

Where’s the money?

“There’s the best question. We couldn’t tell in a lot of cases where it went. Did it go to an individual with the district? This is where there was a breakdown in the record keeping,” says Sontag.

The Seattle Public School District has taken several steps to make sure this kind of mismanagement does not happen again. They have hired an internal auditor, created a new ethics program and set new reporting requirements. The district has also hired an attorney and filed an insurance claim to try and recover some of the lost money.

Three people behind the alleged scheme are facing criminal charges. Silas Potter, Jr. is pleading not guilty to felony theft charges. His next court date is set for February 11, 2013.

David Johnson ran a non-profit called Grace of Mercy which was hired by the district to help small businesses bid on public projects. In addition, he allegedly set up a janitorial firm with the sole purpose of defrauding the district. Johnson has also pleaded not guilty to theft and will go to trial with Potter.

Johnson’s girlfriend, Lorrie Kay Sorensen, is accused of partnering with Johnson in his janitorial company. According to the King County Prosecutor’s Office, she has pleaded guilty to one count of theft in the first degree. She has not yet been sentenced.