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Fulton Schools Changing Conflict Disclosures After State Audit

The Fulton City School District says it has firmed up its conflict-of-interest policies after a state audit found that some members of the Board of Education were not aware that the district’s music department head had an interest in a musical instrument supply store that sold equipment to the district.

The State Comptroller’s audit (which you can read below) finds that the district did not comply with state law because it did not “have policies and procedures to detect potential conflicts of interest and prevent District officers or employees from entering into prohibited contracts.”

At issue is district music facilitator Debra Farden and her husband’s company, Midstate Music of Oswego, which provides musical instruments and supplies to school districts in Oswego and Onondaga counties.  Farden does not own the business but does serve as the corporation’s Secretary.

The audit found that although Farden told administrators regularly about her husband’s business, at least two Board of Education members were not aware that Midstate Music was owned by her husband.  The district approved $4,885 worth of business with Midstate Music during the period covered by the audit.

“(W)e found that not only did the music teacher help determine what types of equipment would be bought from her husband’s store, she also signed the claims to provide evidence of the receipt of the goods and services. When an individual signs a claim to provide evidence that the District received the goods and/or services, this is considered an approval for payment of that claim under a contract.”

The Comptroller’s office is not alleging that the contract was improperly awarded; only that the conflict of interest was not disclosed to the Board of Education and public.  Contracts are generally awarded to the “lowest responsible bidder”.

In a letter attached to the audit, the district said it is revising its policies and posting the law in all district buildings.

The effect of the audit was visible before the audit was made public this week.  At its meeting on July 14, the Board of Education accepted a disclosure statement from Farden noting the conflict, as required by law.

State Comptroller’s Audit of Fulton City Schools, 2009