Audit questions ethics of CCA's $708,000 deal with Eric Swanson
April 12, 2007 - 5:23PM
By PETER DAY
Star Editor
(Originally published April 19, 2005.)
A company run by Eric Swanson, the president of the Hesperia Unified School District's board of trustees, allegedly was paid more than $708,000 by the California Charter Academy "without a description of the goods or services to be provided," according to the audit.
Swanson, who is president of Community Information Services Online, was a member of three CCA governing boards. CISO received the purchase orders -- which included nearly $591,000 for services related to a Digital High School grant and $118,000 for Internet access -- on the same day Swanson resigned from the boards, the report states.
CISO's contract award was one of many conducted by CCA without going through a competitive bid process, according to the audit.
The report implies that the transaction was unethical, citing a CCA board policy that states "the policy of the governing board is to purchase without any personal interest, private advantage or prejudice, seeking to obtain the maximum benefit for each tax dollar spent."
Furthermore, CCA policy states "no favoritism shall be extended to vendors and that no purchase shall be made from a member of the governing board nor from any enterprise in which the board member holds a substantial interest."
From the California Charter Academy Extrodinary Audit, this passage shows Eric Swansons involvement as a board member of 2 of the charter schools who purchased $591,000.00 in computers and $118,000.00 for Internet access from Swanson's company on the same day he resigned from the boards. Read the entire report and you will find that it was a no-bid contract that had no description of the goods or services provided and questions if any goods or services were ever delivered.
Community Information Services Online
CCA Board Policy 3310 states that the policy of the governing board is to purchase without any personal interest, private advantage or prejudice, seeking to obtain the maximum benefit for each tax dollar expended. The policy also is to avoid unfair practices, giving all qualified vendors an equal opportunity. CCA Board Policy 3313 states that no favoritism shall be extended to vendors and that no purchase shall be made from a member of the governing board nor from any enterprise in which the board member holds a substantial interest. The audit team found that contrary to the CCA policy, EASC procured computers and services from a former governing board member.
Eric Swanson was a member of the governing boards for CCA charter schools #262, #297, and #377 until June 30, 2001. The same day that he resigned from the three boards, the company for which he is president, Community Information Services Online (CISO), received a purchase order from CCA charter schools #262 and #297 to purchase computers with the charters’ Education Technology Grant funding.
In addition, CISO received funding from the four CCA charter schools and EASC for Internet and other services. Payments to CISO were almost $591,000 from the CCA charter schools for services related to the Digital High School (DHS) grant and $118,000 for Internet access and other services.
Despite the amount of funds involved, EASC never asked for competitive bids for the DHS grant or Internet services, but rather offered CISO a sole-source purchase order. No contract ever existed between CCA and CISO and as a result, CISO was paid over $708,000 without a description of the goods or services to be provided under the contract, the conditions for payment, or any other normal contract language.
The failure to conduct a competitive bid process for such a large expenditure of CCA funds not only conflicts with CCA Board Policy, but raises the question of whether EASC maximized the CCA funds it expended and whether the former board member was shown favoritism in the award of the contract. Moreover, the fact that EASC failed to describe in detail the specifications of the goods and services to be provided by CISO raises the question of whether or how EASC was able to ensure that the CCAs received all of the goods and services for which they paid. Using CCA funds to pay for goods or services that were not received could constitute a gift of public funds and/or a misappropriation of public funds.
