Ethics and Compliance: Lessons learned from El Paso ISD Region 20 Education Service Center December 4th, 2013 Bill Brown, JD, CPA, Weaver Adam Jones, Weaver

The Case El Paso ISD was a large-scale forensics investigation of a data-manipulation and accountability avoidance scheme implemented over several school years, impacting the education of hundreds of students.

A team of up to 12 staff: investigators, data analysts, accountants, HR and policy consultants, including a former FBI agent and former Dallas police detective Examination of thousands of student records, HR files and s across six school years 155 individual witness interviews Four months of on-site work, culminating in an 86-page report with hundreds of pages of additional exhibits The Scope

Caveats The Criminal Element: The district was literally run for several years by a criminal, eventually convicted and incarcerated The engagement was not originally proposed as an investigation, but as a process examination We had the benefit of HINDSIGHT

What can an education leader take away from today’s presentation to improve a school district? Setting the “Tone at the Top” is not a cliché How do you monitor what happens at a campus? Policies and procedures matter Preventative data analysis Ethics and compliance programs: a people solution

“Tone at the Top ” (not a management cliché) In this case, the superintendent/board relationship was not a “team of eight” but a team of one Inadequate oversight: internal audit was ineffective and reported to the wrong place One bad actor at the top will leave behind an infrastructure even after he is gone—and sometimes worse, a power void

From Central Office to Campus Monitoring disparate campuses is a difficult task in the best of circumstances It is more difficult if the underlying infrastructure (reporting and communications) lacks integrity and campus staff are not empowered Data is one tool…but engagement is more important

Policies and Procedures Matter In some instances, policies were developed to facilitate improper actions at the campus level However, a vast majority of board policies adhered to statute, administrative code and TASB blue book practice…

…assuming they were followed. They weren’t. In a large school district, there are always hidden corners where employees can make bad decisions, often escaping anyone’s notice or knowledge. Policies and Procedures Matter

Preventive Data Analysis Remember, we had the benefit of hindsight… FACT: Bowie High School implemented a scheme to avoid students taking the 10 th grade TAKS, eliminate the LEP subgroup and then advance students past 10 th grade and to graduate them without accountability consequences.

Question: Did campuses other than Bowie exhibit any similar characteristics? Preventive Data Analysis

Avoiding LEP Accountability

50

Skipping 10 th Grade

Code of Ethics Central Office State Law Policy and Procedures Campuses COMMUNICATION* Training Monitoring Reporting Assistance Integrity of DataEducation Reporting Non-compliance

Code of Ethics Central Office State Law Policy and Procedures Campuses COMMUNICATION* Training Monitoring Reporting Assistance Integrity of DataEducation Reporting Non-compliance DISCONNECT

Ethics and Compliance Program Establish a written ethics policy and code of conduct, communicate to ALL employees Be vigilant about updating policies and procedures Be more vigilant about communicating those policies and procedures to employees and third party contractors

Ethics and Compliance Program But remember: This is a PEOPLE solution, not just words on a page. It requires empowerment!

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

Establishes standards for ethical behavior Affixes responsibility for maintaining ethical culture Sets positive example for others to follow The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

Informed employees will be more likely to act ethically Raises awareness of potentially fraudulent conduct by other employees or vendors Encourages reporting of fraudulent conduct (early detection) The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME Commitment to non-retaliation Anonymous reporting extremely important Appropriate response (part of the solution or part of the problem) Reduces detection time Cornerstone to enterprise-wide anti-fraud system

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME Objective/probing Identify stakeholders/isolate interested individuals Utilize appropriate investigative personnel (appropriate skills) Timely conclusion/recommendations

The “People” Solution R EMEDIATION 95% I NVESTIGATE E DUCATE E MPLOYEES R EPORTING M ECHANISM T ONE at the Top R EDUCE D ETECTION T IME

Thank you for all you do for Texas kids! Questions? Comments?