State Auditor Thomas Wagner found numerous problems with the relationship between the Sussex Tech and a contractor who “flipped” land to the district,
According to a statement from Wagner, his office first received an anonymous complaint that Michael Horsey of Laurel purchased a piece of land and then sold it for a high price to Sussex Technical School District.
Sussex Tech then awarded the construction management contract for the High School bus entrance project to Common Sense Solutions, LLC (CSS), a business owned by Horsey.
Wagner stated that documents provided by Sussex Tech and Sussex County land records. Governmental Services, LLC, a business owned by Horsey, purchased the land parcel Sussex Tech needed for the High School Bus Entrance project for $110,000 and sold it to Sussex Tech two weeks later for $200,000.
In addition, the auditor’s office obtained documentation proving that Horsey had prior knowledge of Sussex Tech’s need for the land parcel.
CSS, another business owned by Horsey, was subsequently awarded the contract for the High School Bus Entrance project for $205,699.
Sussex Tech was awarded CSS additional construction contracts for other construction projects by way of “piggybacking” from the existing bus entrance contract.
The office determined that $3,873,431 in expenditures was paid to Horsey’s company for the period July 1, 2011, through November 4, 2016.
AOA’s review identified an overall lack of support for invoices, numerous State of Delaware Budget and Accounting Policy Manual violations, avoidance of fair procurement processes, and conflicts of interest
. In an effort to avoid oversight by the state, Wagner’s office identified 105 payment vouchers with a total dollar amount of $929,682 that appeared to be split in order to stay below the thresholds requiring purchase orders, three letter bids, and competitive bidding.
In addition, the former Director of Facilities retired from Sussex Tech on July 1, 2015, and was subsequently employed by CSS as the project coordinator and liaison for Sussex Tech projects. These projects were the same contracts he awarded to CSS and managed when employed by Sussex Tech.
The report indicates that Sussex Tech lacked appropriate scrutiny of transactions and enforcement of fiscal policies and procedures.
The School Board entrusted Sussex Tech administration to make decisions regarding the construction projects without the School Board’s involvement which created a lack of accountability. These practices and violations are still occurring as of the release of this report, and CSS continues to gain additional contracts from Sussex Tech, the report indicated.
For the full results of the inspection, click on the report.