A whistleblower complaint lodged in August 2016 by former Dallas Independent School District (DISD) construction manager Zachariah Manning prompted two investigations into the district’s Capital Improvement Department.
DISD’s Office of Internal Audit conducted one investigation. The other was conducted by the Texas Education Agency (TEA), the state’s regulatory body for public education.
As previously reported in The Dallas Express, then-DISD auditor Andrea Whelan looked into Manning’s allegations in 2017. Manning had accused Capital Improvement Director Sylvia Peña and Maintenance & Facility Services Executive Director Willie Burroughs of engaging in a scheme to circumvent public bidding mandates for taxpayer-funded job contracts priced at $500,000 or more.
Whelan’s draft report on the matter held that Manning was correct in identifying a pattern of corruption in his department, seemingly with Peña at the center.
However, Whelan examined DISD officials’ response to the TEA probe during her investigation. Statements made to Whelan by DISD officials about the district’s response, as well as alleged subsequent uninvited revisions made to her draft report, suggested to her that individuals at DISD were attempting to cover up violations of Texas law.
Such issues of mismanagement in DISD emphasize the negative environment in which its hardworking teachers must try to educate their students. These heroes struggle against the district’s politicized and poorly-run administrative body to provide an education to Dallas’ youth.
TEA had apparently closed its investigation into the Capital Improvement Department on November 18, 2016, just a few months after Manning lodged his complaint and after receiving a “rebuttal” to the accusations.
According to court papers obtained by The Dallas Express, then-Superintendent Michael Hinojosa tasked former Chief Financial Officer James Terry with crafting a response to submit to TEA after Manning filed his whistleblower complaint.
Terry collected statements from the relevant parties, including Peña, and submitted the district’s response to TEA.
For her part, Peña denied knowingly or intentionally circumventing the public bidding mandate when it came to job order contracts at the Capital Improvement Department.
The thrust of DISD’s response, drafted by Terry, amounted to a similar assertion that personnel at the Capital Improvement Department did not break the law:
“The District has not intentionally kept [projects] under $500,000 to avoid procuring through competitive sealed proposals. … The Capital Improvement Department follows the laws, policies, and procedures for procuring goods and services. … The allegation that employees avoided, circumvented, and otherwise attempted to operate outside of established protocols is inaccurate and unsubstantiated.”
TEA appeared to accept the district’s word.
However, Whelan discovered that Peña had offered these statements to Terry, and he included them verbatim in the district’s official response. He also allegedly took some editorial liberties with the words of others.
DISD Procurement Services Executive Director Kimi Tate submitted a statement to Terry to be included in the response.
In her statement, Tate noted that DISD’s procurement system lacked a critical software check that would theoretically be able to identify “project stacking,” one of the manipulations of job order contracts allegedly committed by Peña.
Terry struck Tate’s comments from the district’s response.
Further comments by other DISD officials interviewed by Whelan shed light on DISD’s response to the whistleblower complaint. Perhaps most importantly, officials seemed very aware that projects were structured in such a way as to fall under $500,000 and evade the public bidding process.
Whelan asked then-Chief Operating Officer and Deputy Superintendent Scott Layne about a meeting he had with Burroughs, Terry, and Tate — a meeting Layne had called to voice concerns about procurement practices shortly after officials learned of Manning’s complaint to TEA.
“I no longer recall the specific nature of the concerns I may have expressed at the time,” Layne stated.
Still, Layne did not entirely stonewall Whelan.
“I remember meeting with them initially … and the comment being made that it appeared that stacking of projects occurred,” he said.
“During the period in which the response to TEA was being crafted, I do not recall that there was any formal review of the Capital Improvement Department’s job order contracts by Tate or anyone else in Procurement Services,” he stated further.
It seemed that Peña’s alleged exploits were well-known enough at the meeting and that little, if anything, was done to get a firm accounting of how many job order contracts were allegedly broken up and run under the radar.
Whelan noted in her report, immediately after detailing Terry’s edits:
“Texas Penal Code, Title 8, addresses the potential consequences of submitting false written statements for inclusion in the district response to the TEA inquiry.”
She further alleged in her report that Peña had made a number of untrue statements to the Office of Internal Audit and TEA, citing multiple coworkers familiar with her allegedly criminal approach to her job.
Peña resigned in September 2017, the same month Whelan interviewed her for her report. The matter did not, however, end there.
The Dallas Express will continue spotlighting this saga to bring increased transparency and accountability to local institutions.
