1. 1 HISD HISD E-Rate Policy Update Gifts, Campaign Receipts, Business Relationships, and Internal Controls May 6, 2010 Richard Patton E-Rate Compliance Officer

2. 2 HISD  Background  Gifts  Campaign Receipts  Business Relationships  Miscellaneous Controls Agenda

3. 3 HISD  Preliminary training covering gifts, campaign receipts, and business relationships was provided on March 25, 2010  Board approved E-Rate Policy on April 8, 2010  Cabinet approved detailed E-Rate Administrative Regulations on April 12, 2010  Trained approximately 220 E-Rate employees to date History

4. 4 HISD  E-Rate Program Employees and Board Members are prohibited from accepting:  Any gifts, meals, entertainment, or any other thing of value from any outside entity (or any consultant or other individual representing such an entity) that provides or seeks to provide goods or services pursuant to the E-Rate Program either directly or through a joint venture or resale arrangement  Exception - items of de minimus intrinsic value, such as a single greeting card, basic key chain, or basic pen  Appearance of a conflict is as important as a real conflict  Where unavoidable, return item to vendor or submit to Inspector General  Discuss summary of controls regarding logging and gifts that have been offered Gifts

5. 5 HISD  Proposed Revision - Board Members should not knowingly accept campaign funds from E-Rate Vendors & related officers/key employees  Consequence of non-compliance - Voting rights are prohibited on such contracts once $500 threshold is met, taken as a whole, over a calendar year  Summary of policy concerning communication, research, and monitoring process  Enforcement Campaign Receipts

6. 6 HISD  Business relationship is defined as the Board Member’s acceptance or receipt of amounts in excess of $2,000 in the course of any business dealings with an E-Rate vendor, consultant, or individual representing such an entity  Consequences of exceeding the limit - Voting rights are prohibited on such contracts when receipts over $2,000 are received, taken as a whole, over a calendar year basis  Summary of policy concerning communication, research, and monitoring process  Enforcement Business Relationships

7. 7 HISD  Inspector General will receive cumulative reports of Campaign Receipts and Business Relationships for consideration in periodic risk assessments and inclusion in audit plan  Disclosure of Interest Form – updated to include specific questions pertaining to E-Rate matters  Mandatory Quiet Period o E-Rate Program Rules disallow communications with E-Rate Vendors, et al between the time a Request for Proposal (RFP) is issued through contract execution (except for limited conditions allowed to the Procurement Department). o Proposed Revision - Extends existing quiet period for Board Members and District employees so that communications with E-Rate Vendors and related officers/key employees are not allowed for 30 calendar days prior to the RFP process, to the best of your knowledge Internal Controls

8. 8 HISD  Mandatory Quiet Period, con’t. o The quiet period does not apply to communications regarding existing E-Rate contracts o E-Rate Compliance Officer will communicate commencement of 30 day quiet period Internal Controls

9. 9 HISD  Request Board Member approval on May 13, 2010  Publicize on E-Rate web page no later than June 8, 2010 Next Steps