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Oklahoma Education Department spent $2.3 million through slush funds, audit claims

An investigative audit conducted by the Oklahoma auditor's office shows $2.3 million was spent by the Oklahoma Education Department through undisclosed accounts. The audit claims the money was used to pay for drinks and food at education conferences.
BY MEGAN ROLLAND AND CARRIE COPPERNOLL Published: March 8, 2012

The state Education Department used two undisclosed bank accounts as slush funds for drinks, food, entertainment, travel and more to host state education conferences, spending $2.3 million over the past 10 years, according to an investigative state audit released Wednesday.

The hidden accounts first appear on records in 1997 — seven years after former state schools Superintendent Sandy Garrett took office — and they were transferred to new accounts maintained by the Oklahoma State School Boards Association months before she left office in 2010.

“These off-book and unauthorized accounts allowed (Education Department) officials to pay, at a single event, $2,600 for 85 bottles of wine and 3 kegs of beer and $5,700 for food items including a ‘chocolate fountain,' ‘Maryland crabcakes,' ‘mini beef wellingtons,' and ‘smoked salmon mousse in a puff pastry,' without following any of the requirements normally associated with government expenditures,” the report from the state Auditor and Inspector's Office says.

The slush funds allowed Education Department officials to pay for alcohol, food and lodging “shielded from governmental oversight as well as public scrutiny.”

Garrett, who held office for 20 years, said the whole thing is a misunderstanding and that the creation and use of the funds was vetted by the attorney general at the time and the Education Department's legal counsel.

“I've been in public office for a long time and the last thing I would condone or approve is any type of illegal activity,” Garrett told The Oklahoman on Wednesday. “I think everything is worth a look, but I think everyone deserves to try to tell the story and the real story is I believe this is a service to education in the state of Oklahoma.”

The audit notes that attempts to reach Garrett were unsuccessful. Garrett said she only received one voice message on Tuesday night requesting an interview.

Several assistant state superintendents are named in the audit and participated in soliciting funds and writing checks.

Ramona Paul, former assistant state superintendent, said she had no knowledge of the funds, until it came time to transfer them out of the department. She said she signed checks only to verify they were correct.

“That money to the best of our knowledge absolutely would not be state funds of any sort,” Paul said. “Sandy Garrett had a very strict rule of following state rules that we could not expend any state money on food or drinks.”

Cindy Koss, another former state superintendent, said she was told the attorney general had authorized the accounts.

“Taxpayer funds cannot be used to pay for food or beverages under any circumstances,” Koss said. “If a state agency puts on a meeting to serve its constituents, it cannot serve lunch or even coffee unless private donations are solicited and used.”

Koss said she volunteered her time on the board to help raise the substantial funds necessary to host a two-day conference and meet the needs of attendees.

Hidden accounts

The accounts were set up in the name of the nonprofit Oklahoma Curriculum Improvement Commission, which had a separate board of directors whose members were completely unaware of the funds.

“Not only were the (nonprofit's) board members unaware of the accounts, but some of the (Education Department) officials may have deliberately concealed those accounts from the ... board of directors,” the audit states.

According to the audit, Education Department officials acted on behalf of the OCIC when they solicited payments from vendors or companies attending education conferences hosted by the department. They deposited those payments into separate accounts.

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