An important update on financial transparency/oversight and new FOIA information

Disclaimer:  Nothing in the following material is meant to be construed as a claim that any school board member or district employee has violated the law, as I am not a lawyer and have not used the services of a lawyer in making the statements below.  Likewise, in some instances, my conclusions rely on the absence of information; I will correct any mistakes if notified or revise as appropriate if notified of explanations due to “innocent” mistakes.

In my prior statement, “More on transparency and oversight,” I outlined various ways in which the board had acted with opacity rather than transparency and had failed to follow good governance principles.  Subsequently, I expressed my concern with the manner in which the board kept the departure of former CFO Cathy Johnson hidden from the public.

I have now learned additional details, via additional conversations, additional review of public materials, and FOIA request information.

What follows will be quite lengthy, but here’s the key conclusion: The board has had a consistent practice, particularly in the past 1 – 2 years, of keeping key information from the public.  I do not have evidence of specific instances of corruption happening under the board’s watch. However, it is clear that the board has created a climate where corruption could occur by avoiding the requirements that are meant to protect the community.  In addition, the facts demonstrate a lack of oversight that led to poor decision-making by the staff.

Read on for information on

  • The mysterious termination of key executives in the school administration,
  • Hidden multi-million-dollar contracts for the Forest View renovation project,
  • Strange machinations surrounding the purchase of the District 59 administrative building,
  • The purchase and subsequent sale (without being used once) of 9 Ford F-350s, and
  • General contracting/disclosure concerns.

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We in Illinois have become all too willing to shrug these issues off as an inevitability, but good governance matters just as much as student test scores, even if it doesn’t show up in the school rankings.

More on Cathy Johnson’s termination

According to a December 22, 2022 report by the Daily Herald, Cathy Johnson resigned on September 15, 2022, and was paid over $180,000 in severance.  Based on her employment contract, this amount was the amount due in the case of “without reason termination by the Board.”

As it happens, September 15 was Ms. Johnson’s formal resignation date, but this was not her last effective date of employment.  Ms. Johnson actually stopped working for District 214 on August 8, 2022.  In addition, she was not the only individual leaving on this date:  Director of Operations Ken Roiland and Assistant Director of Operations Marta McCullough also left on this date.  In Roiland’s case, he had previously submitted an intent to retire in December 2022, but on August 8, he submitted a letter with a revised retirement date of August 12, 2022.   In the case of McCullough, her formal termination date was the same as Johnson’s, with a similar resignation document, though with a severance payment only lasting through December 31, 2022, where a termination “for reason” would have not qualified her for any severance and a termination “without reason” would have required the same full-year payout as for Johnson.

I feel confident in asserting that August 8, 2022 was the last effective date of employment for this reason:  as a result of a FOIA request for the final 10 e-mails sent by each of these individuals, I know that the last e-mails sent by each of these individuals were dated August 8, and none of them suggest any intention to leave, any transition of tasks, any farewell, or any indication of a vacation (let alone one that would cover a full month through September 15).

Given this information, it is not only a reasonable inference that these three were terminated rather than voluntarily resigning, but it is also highly improbable that the facts could be otherwise, even though the district, in its agreement with Johnson, has contractually committed to disclosing no additional information except what is required by law.

Obviously, this raises the question, why were these individuals terminated?

Important Background on the Illinois School Code Requirements on Contracts

If you attend a typical school board meeting at District 214, you will notice that the bulk of the votes take place via the “consent calendar” and have to do with financial approvals rather than discussion of board policy on such matters as curriculum, staffing, and so on.  To my understanding, the Illinois School Code does not set out any official stipulations about what sorts of curriculum decisions must be approved by the board rather than decided upon by the superintendent.  (I would argue that a good rule of thumb is “decisions which a substantial portion of the community would be upset about, should be made by the board, for accountability’s sake,” but that’s another story.)  With respect to financial approvals, in contrast, Illinois School Code is very clear:  “The board shall by record vote let all contracts (other than those excepted by Section 10-20.21 of The School Code) for supplies, materials, work, and contracts with private carriers for transportation of pupils, involving an expenditure in excess of $25,000.”  Likewise, the exceptions in Section 10-20.21 are fairly narrowly defined and include such items as contracts for professionals (e.g., accountants), contracts for “the purchase of perishable foods and perishable beverages,” contracts for “duplicating machines and supplies” and various other exceptions.  There are several exceptions related to construction:  change orders in an existing contract don’t need to be re-approved so long as the increase is less than 10% of the cost; emergency expenditures don’t need to be approved, and the threshold is $50,000, rather than $25,000 for “contracts for repair, maintenance, remodeling, renovation, or construction, or a single project . . . and not involving a change or increase in the size, type, or extent of an existing facility.”

In addition to the requirements around contract approval, there are further requirements around the bid approval process; there are specifications around advertising bids and accepting the “lowest responsible bid” so as to not play favorites or get kickbacks.

Finally, there are Open Meetings Act requirements that the actions of the school board must be done in public meetings.

The Forest View Renovation Project

Given the above background on statutory requirements, the actual practices of the school board of District 214 would appear to violate the law in multiple instances.  To the extent that they have carefully followed the letter of the law, they are not acting in keeping with the spirit of the law, and its intention to prevent corruption and ensure fair dealing in district finances.

With respect to the Forest View renovation project, many members of the community were taken by surprise that the construction was so extensive that the November 29, 2022 board meeting was held at an alternate location, that is, the former District 59 administrative building (more on this later).  Upon inquiring, I was told by the FOIA officer that the board had approved construction in the Forest View building on May 26, 2022.  However, a close examination of the minutes for that meeting and the applicable contracts indicates either an indifference to properly informing the public or a deliberate attempt to keep the public in the dark.

Specifically, the meeting minutes for May 26, 2022 are found both at the BoardBook site and as a PDF found through at the Archived Minutes link on the website.  In both cases, the Consent Calendar refers to an approval of a casework bid and a performance contracting bid “attached to these minutes.”  In neither of these sources is there an attachment.   Upon request, the FOIA officer provided a link to an alternative version of the minutes which included these attachments.  The “Casework Package” was an approval of a $441,377 bid for casework, that is, cabinets and whatnot for the building.   The “Performance Contracting” bid said the following:

The program consolidation project at FVEC has energy-saving facets. This allows the school district to explore additional construction methods designed around energy savings, called Performance Contracting. The District will be receiving proposals from Performance Contractors that will provide cost estimates and energy-saving projections for a portion of the work projected for the program consolidation. This will allow the District to make an educated decision on the best method of construction to ensure the program consolidation project is completed on time. The District has received one quote utilizing a purchasing cooperative. Performance contracting will provide another quote for analyses in evaluating the proper construction management method to ensure the project will be completed on time.

The document does not provide any actual bidders or sums bid.  Then the “recommended action” which follows is

The Board of Education accept the most qualified and comprehensive proposal for the Performance Contracting work at Forest View Educational Center. The proposals will be presented at the Board Meeting as the deadline for submitting proposals is Wednesday, May 25, 2022 at 2:00 p.m. Central.

The Board hereby authorizes its Superintendent or designee to approve and execute contracts on behalf of the Board for services related to the project and to approve and execute change orders.

Subsequently, a bid was received by Allied Facility Partners on May 27 (in other words, one day after the board meeting and two days after the supposed deadline for bids), and this bid was approved on May 31.

The text of this document reads as if the contract in question is for a small piece of the overall project, a component related to energy savings.

In fact, the contract which was signed on May 31 was for $8,200,000, and, according to the contractor’s website, was for the entirety of the project.

Did the language of the board approval document enable the board to meet its legal obligations to approve contracts, literally and narrowly, because of the language authorizing the superintendent to approve the contract?  This seems improbable because it would provide such a massive loophole as to allow districts to skirt the key objective of the law in the first place, the open approval of contracts to avoid corruption.  It would also be counter to 105 ILCS 5/34-21.3, which reads “The board may delegate to the general superintendent of schools, by resolution, the authority to approve contracts in amounts of $25,000 or less.”

Even assuming for a moment that there was no legal violation, this raises serious concerns.  The bidding process is standardized and routine.  There should have been no reason for them to need to approve bids with such urgency, for a project that had been so long in the making, as to require a bid approval without the information being made public on, again, an $8.2 million project.

Recall that the Code provides an exemption to the legal disclosure requirements for “emergency” expenditures.  Was this was justified as an emergency, because of the need to do as much construction as possible during the summer?  That would be a stretch (again, this was long-planned), but that could only mean that something pretty serious had gone wrong up to this point, and, again, whatever this was, it was hidden from the public.

In short, regarding the Forest View construction, their contract approval process, whether intentionally or by indifference or due to poor management, kept hidden from the public any details regarding the size, scope, or vendor.

The District 59 Administrative Building Purchase

This was another instance of a district action undertaken in a way that kept important information from the public.  The main facts were reported by Journal & Topics on December 23, 2022, and I am able to supplement this with the FOIA’ed purchase contract.

In November 2021, the school board approved a five year lease of the former District 59 administrative building.  This was a lease-to-own agreement with a payment of $2.3M for the first year, $2.2M for the second year, $600,000 for the third year, $$225,000 for the fourth year, and $125,000 for the fifth year; and simultaneously, a decreasing purchase price, which stood at $3,050,000 at the end of the first year when the district made its purchase, but dropped to $50,000 by the end of the contract.

Again reviewing the lease agreement, the only indication in the minutes for November 11, 2021 is that it was a true lease agreement, of the sort that would have made sense for a temporary office location due to construction.

When the district finalized the purchase of the property, on November 1, 2022, it did so under questionable circumstances.  As the Journal & Topics reported,

Legally, Dist. 214 Board of Education members are allowed to discuss the lease or purchase of real estate in closed session as they did before approving the lease-to-purchase agreement in 2021, but votes on actions must be made in an open session. Also when conveying into a closed session, the reason, such as the discussion of real estate or pending litigation, must also be listed.

A review of meeting minutes by the Journal & Topics, related to closed sessions between December 2021 and November 2022, did not list anything indicating discussion of the 2123 Arlington Heights Rd. property or authorizing the purchase option within the lease agreement.

I am also not an expert on real estate contracts, but a simple examination of the terms of the contract suggests that this was designed with the expectation that the district would purchase this property at some point during the term of the contract, but wanted flexibility as to when that purchase would take place.  Whether they designed the contract this way in order to circumvent some aspect of the public disclosure requirements and keep the purchase hidden temporarily, or whether there was some other finance-related reason, I can’t say (though the district has plenty of working cash, so it seems to me to be unlikely to have been a matter of needing to get access to cash to finalize the purchase).

Again, whether the district violated any law, I cannot say, but it would clearly have been in the best interest of the public to be open about this transaction.

Finally, to add to the ongoing concerns, the lease agreement implies there would be renovations needed before the building is usable, because the first rent payment is due on the date “Construction/Improvements begin by District.”  Yet, again, there are no contract approvals related to this work.

The Vehicle Purchasing Fiasco

Smaller in scope but indicative of similar issues is the district’s purchase of 9 Ford F-350 trucks.

This traces back to March 4, 2021, and a Facilities Update presentation at the board meeting by Roiland and McCullough.  Because at the time the district did not record its meetings, the only information is available through the meeting minutes, as follows:

this coming year, the District will bring snow and ice removal in-house as the department continues to enhance efficiencies with centralizing operations to capitalize on greater flexibility of scheduling and staffing.

On September 9, 2021, the district placed a purchase order for 9 F-350 trucks at a total cost of $411,000, with a shipping date of September 27, 2021.  On January 10, 2022, that purchase order was reissued.  Payments to the vendor were actually approved by staff member Chris Uhle on December 5, 2022.  (Note that the timing of when the District actually took delivery of the trucks is not entirely clear.)

Then, on January 19, 2023, in a Resolution for the Disposal of Surplus Personal Property (viewable as an agenda attachment at the BoardBook website), we see the following:

On January 20, 2022, the Facilities Five-Year Planning and Capital Projects Program was presented, during which a plan to bring the Snow-Removal Program for each facility in-house was shared. To this end, the District utilized Sourcewell cooperative purchasing to procure nine Ford Super Duty F-350 DRW XL 4WD SuperCab 8’ Box 164” WB. Due to changes in staffing, the labor market, and outsourced snow removal options, the plan to bring the snow removal program in-house is no longer cost-effective. . . . The District will likely recoup most, if not all, of the funds spent.

Once again, there is no indication that the board approved the purchase of these vehicles.  I can find no reference in any meeting minutes during the timeframe from the original March 4 presentation to the ultimate purchase of the vehicles, to a board approval.

In addition, it is questionable whether this plan was ever a reasonable one in the first place and whether it was truly “changes in staffing, the labor market, and outsourced snow removal options” which caused the need to abandon the plan, or simply a recognition that it had never been feasible in any case.  Certainly, there is no indication in the minutes that Roiland and McCullough presented the case for the in-house snow removal as cost-effective, feasible, or in line with other districts, or that they discussed its feasibility with respect to the district CMA staff at the time they formulated this plan, and there is no indication that the board questioned the two of them about these issues.

This follows a general pattern. The board, ever intent on avoiding looking bad or displaying any hint of disagreement, never questions any actions taken by the school administration. This either means there is no effective oversight, or that relevant discussions happen away from the public, among a smaller group, or in violation of the Illinois Open Meetings Act.

While the current supply chain issues mean that the statement of recouping costs is likely correct, this could have had quite a different outcome in other circumstances.

Inappropriate Insourcing

At the same meeting at which the in-house snow-removal plan is presented,

M. McCullough described the in-house design process for some of the construction projects and the use of in-house maintenance staff to do the construction and construction management functions, at a savings to the District.

It is not the norm for district staff to perform the design and construction management function staff themselves.  That is the role of architects and construction managers, and, indeed, as a part of the contract approvals in 2018, Pepper Construction Company was the named construction manager.  The step of moving these functions in-house is a substantial one, but there is no evidence of any board oversight — no assessment of whether the individuals performing this work were qualified, no verification that the in-house management was producing quality work rather than merely cost savings.

And, in fact, on January 31, 2023, Board President Dussling signed a master agreement returning to the use of Pepper Construction Company as its construction manager.  This document was provided to me through a FOIA request, and it does not appear on the meeting minutes, and even then, I do not have complete information, as the document references a Sample Project Work Order as an exhibit which was not included.

At a recent board meeting, the board members celebrated “passing” their annual audit.  Again to clarify the scope of my qualifications, I am not an accountant, but given the chain of events — Roiland and McCullough bringing this work in-house, then the three of Johnson, Roiland and McCullough leaving simultaneously (as in: being terminated), and then returning this work to the usual norm of a construction manager, I believe this requires more investigation.


The above examples are large in scope.  But in smaller ways, the district has also abandoned prior practices.  Meeting minutes in 2022 no longer specified the details of the bids, but often simply state the generalities of the bids, for example, on May 12, 2022, “Approved Photography Supplies Bid” and “Approved Science Supplies Bid,” where in prior instances, the details of the proposals, including vendors and amounts, were provided to the public.  In addition, Illinois law requires school districts to post on their website all contracts over $25,000.  Until I recently called on them to do so, this had been missing from their website.  Even now, they only include a single year, 2022, when the official state guidance is for all contracts to be posted, for all years following the law’s enactment in 2008 Furthermore, the list of vendors paid in 2022 is a far longer list than the list of contracts approved by the school board in 2022, based on my review of meeting minutes.  (I count 19 board approval items, but the vendor list has 76 items.)  Is it possible that some of these are multiyear contracts, and others fall into the exceptions to the rules about open approvals, and that I have miscounted in my meeting analysis?  Sure.  But it certainly speaks to the board practice of providing as little information as possible rather than actively seeking to do what’s right and act in the public interest.

Again, to be clear, it is not possible to know whether any school board members been involved in any wrongdoing, or whether the board members have looked the other way in any employee wrongdoing.  But the requirements for open and public approval have an important purpose, and it is the board which is responsible for defining the culture as one of transparency and proper management.  It is not enough that the district has a balanced budget; any mismanagement or, yes, even corruption, means less money that could have been spent on students’ education, employees’ salaries, or used to reduce tax levies.

And perhaps in any one of these instances, I have misconstrued the facts due to my limited information.  But these issues are recurring, and it seems highly improbable that each such concern has a satisfactory “innocent” explanation behind it.

Final thoughts

As I said at the start of this report, proper board behavior regarding transparency and oversight matter.  We cannot allow ourselves to get distracted by politics or shrug this off as normal.  Likewise, it is not acceptable for any board member to themselves shrug this off or claim that these behaviors are normal and unavoidable, or not their responsibility.  Please join me in demanding better.

— Elizabeth Bauer, board candidate

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