Andrea Whelan Draft Report

MIKE SINGLETON, CPA
Chief Internal Auditor

OFFICE OF INTERNAL AUDIT
3700 Ross Avenue, Dallas, TX 75204
To: Mike Singleton, CPA, Chief Internal Auditor
From: Aaron Munoz, CPA, CFE

Deputy Chief
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REPORT OF INVESTIGATION
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RE: Pena, Sylvia # ID Last Name2, First
Name2
#ID2
Former Director Title
Capital Improvement Department/School
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Department
Case Number: 15728 Case Number
Type of Investigation: Administrative
Type of Report: Draft

Person to Contact: Andrea Whelan Manager
Office of Internal Audit
9400 North Central Expressway
Dallas, TX 75231
(972) 925-3319
To: Michael Hinojosa, Superintendent of Schools
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From: Mike Singleton, CPA Chief Internal Auditor
 
OFFICE OF 
INTERNAL AUDIT 
3700 Ross Avenue, Dallas, TX 75204
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Table of Contents
Executive Summary .........................................................................................................................4

The Capital Improvement Department’s Use of Job Order Contractors ......................................7
Employee Status ..........................................................................................................................9
Extent and Results of Investigation ................................................................................................. 9
Referral to Outside Agency ........................................................................................................ 29
Explanations and Defenses Offered ..........................................................................................29
Relevant Policies and Procedures .............................................................................................29
Conclusions ................................................................................................................................33
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Executive Summary
Per a Board directive, the Office of Internal Audit (OIA) expanded upon a prior joint investigation with
outside counsel, into the Information Technology Department’s procurement of Qlikview software and
related consulting services. The purpose was to identify any other “pass-through” arrangements designed
to circumvent the competitive process or other procurement related waste, fraud, or abuse.
Complaints from multiple sources, including former Capital Improvement Department (CIP) Manager
Zachariah Manning, initially led the OIA to focus on job order contracting (JOC) practices and the alleged
circumvention of established procurement protocols, under the leadership of CIP Director Sylvia Pena.
Reports of alleged favoritism in vendor selections, however, extended beyond the JOC program.
A separate report on process and control deficiencies set forth the reasons the JOC method was
unsuitable for delivering the “best value”1 for the CIP projects at issue. This report focuses on fraud,
financial impropriety, and abuse of public funds.
The investigation revealed Pena attempted to use JOCs with Phillips-May in order to use the services of a
particular, non-awarded vendor. 2 She later used a non-awarded vendor in a JOC type capacity, even
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though the project management company was not an awarded JOC firm. Further, with knowledge that
internal craftsmen completed certain wheelchair ramp projects, Pena signed requisition requests for
vendor installations of the same ramps.3 In those instances, Pena either intended to have brand new
ramps removed and replaced, or sought the issuance of purchase orders for work that she did not expect
to be performed.
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Zachariah Manning claimed he was terminated as a direct result of a report he made to the Texas
Education Agency (TEA) alleging that Pena avoided the competitive process by various methods,
including keeping each purchase order under $500,000, when it was known in advance that projects
would exceed that amount. In Manning’s words, his allegations related to “hail storm roofing project
package #4 and other proofing projects, but not limited to roofing projects within the Capital Improvement
Department.” At Superintendent Michael Hinojosa’s direction, former Chief Financial Officer James Terry
prepared a response to a TEA inquiry sparked by Manning’s complaint. To do so, Terry collected
responses from Deputy Superintendent Scott Layne and Procurement Services Executive Director Kimi
Tate. Pena submitted the following statements (through Layne) which Terry included verbatim in the final
response:
1) “The District has not intentionally kept [projects] under $500,000 to avoid procuring through
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competitive sealed proposals…”
2) “The Capital Improvement Department follows the laws, policies, and procedures for procuring goods
and services as established by the State of Texas, Texas Education Agency and the… Board of
Education. The allegation that employees avoided, circumvented, and otherwise attempted to operate
outside of established protocols is inaccurate and unsubstantiated.”
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1According to Texas Education Code 44.031(a) all contracts…valued at $50,000 or more in the aggregate, for each
12-month period are to be made by the method that provides the “best value” for the district.
2 Per a project manager’s journal entry, dated January 11, 2016, “Sylvia gave directive to stop using Solar Systems,
Inc.”--the sole awarded vendor for the specified services.
3 Because Pena avoided using the awarded vendor, funded wheelchair ramp installations were stalled. A Webster
Elementary principal made repeated requests for ramps, on behalf of four wheelchair bound students. After 14
months, the Maintenance Department built the ramps with wood.
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3) “…Capital Improvement…has procured goods and services in compliance with…laws, policies, and
procedures.”
The response to the TEA’s office of Complaint Management, Division of Governance and Investigation,
cited external audits void of findings of procurement related control deficiencies and a “legal review”4
showing no avoidance of the competitive process or evasion of the requirement to seek Board approval
for projects costing over $500,000.5 Based on the response, the TEA closed its review in December 2016.
While the OIA did not determine the basis for his termination, the evidence substantiated Manning’s
procurement related allegations. Pena, who annually managed $15 million in deferred maintenance
funds, repeatedly violated Purchasing Manual directives, policy, and law.
Costs associated with many CIP projects exceeded $500,000. Witness testimony and district records,
however, showed Pena deliberately structured procurements to prevent any purchase order from
exceeding $500,000. When subsequently faced with cost overruns on some projects, Pena directed the
continuation of vendor services without authorized purchase orders. To pay vendors for services rendered
without purchase orders, Pena employed various methods designed to separate the payments from the
projects to which they related. According to witness accounts, the unauthorized transactions documented
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in this report were not out of the ordinary for Pena. Thus, the referenced statements Pena provided for
CFO Terry’s use in preparing the response to TEA were untrue.
Texas Education Code § 44.032
(a) In this section:

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(1) "Component purchases" means purchases of component parts of an item that in normal
purchasing practices would be made in one purchase.
(2) "Separate purchases" means purchases, made separately, of items that in normal purchasing
practices would be made in one purchase.
(3) "Sequential purchases" means purchases of items over a period, that in normal purchasing
(b) An officer, employee, or agent of a school district commits an offense if the person with criminal
negligence makes or authorizes separate, sequential, or component purchases to avoid the requirements
of Section 44.031(a) or (b). An offense under this subsection is a Class B misdemeanor and is an offense
involving moral turpitude.
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There were instances when Procurement Services personnel accommodated Pena’s questionable
methods. Relative to transactions in the latter part of 2016 forward, however, Pena received clear and
appropriate direction from Procurement Services. For example, in October 2016, Procurement Services
Buyer Robbie Daniels sent Pena a message that opened with, “The attached request has been rejected
because this is considered sequential purchasing.” Following other similarly themed messages, the
Procurement Services Director of Operations wrote the following in an April 6, 2017, message to Pena:
“…you cannot break purchases apart just to get stuff done faster.” Pena’s actions, subsequent to her
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receipt of these messages, demonstrated her intent to circumvent established policies and procedures.
They also revealed the untruthfulness of the statements she submitted in response to the TEA inquiry.
Finally, the investigation revealed a JOC (Phillips-May) repeatedly used a particular certified women
owned business enterprise (MWBE) as a subcontractor. Providing no commercially useful function, the
subcontractor passed the whole of the work on each project to a sub-subcontractor, keeping a portion of
4The investigation revealed there was no legal review of the TEA response or any supporting documentation
associated with it.
5Per Texas Government Code, Section 2269.403, the Board shall approve each job, task, or purchase order that
exceeds $500,000.
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the contract amount (typically, approximately $3,500) for serving as the “MWBE pass-through”. This and
other vendor practices and relationships merit further scrutiny.
Background
Board of Trustees’ Request for an Expanded Review of Procurement Practices
In February 2017, the Office of Internal Audit’s Investigative Services unit (OIA) and outside counsel
completed an investigation of the Information Technology (IT) Department’s procurement of Qlikview
software and related consulting services. Upon learning the results, the Board asked the OIA to expand
its review to identify other “pass-through” arrangements designed to circumvent the competitive
procurement process and/or other procurement irregularities resulting in waste, fraud, and/or abuse.
The OIA initially responded by reviewing other IT Department transactions, which revealed sole source
procurements to be a concern. A separate report addressed that matter.
The OIA’s Receipt of Allegations Associated with the Capital Improvement Department
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In addition to the Board directive, the OIA received a number of reports of procurement irregularities
associated with the district’s Capital Improvement Department (CIP) largely related to job order contracts
(JOCs). The table below summarizes the nature of the allegations:
Case
Reported Party Nature of Complaint / Allegations Exhibit Reference
No.
15087
CIP Director
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•
•
•
Avoidance of competitive process
Sequential billing
CIP projects kept just under $500,000 when it was
W1-1, Complaint
W1-1A, Correspondence
with the TEA
Sylvia Pena
known in advance that the actual cost would exceed W1-1B, Memo of
that amount Interview
Seeking Procurement Services approval of “component W1-2, Complaint with

15547 Pena purchases” of portable buildings (for Carr Elementary) to associated supporting
avoid Board scrutiny material
Pena & • Favorable treatment of selected vendors

Maintenance & • “…local job order contractor…using a sub-contractor
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W1-3, Complaint with
Facility Services from Houston instead of Board approved vendors”-
15549 associated supporting
Executive [REDD] Team
• material
Director Willie “Stacking jobs so they don’t need Board approval” –
Burroughs e.g. roofing projects
W1-4A, Complaint
Ramps were installed at Webster Elementary without an
15563 Non-specified W1-4B, Associated
approved assignment of work.
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procurement records
W1-5A, Complaint
Pena and
15564 Favorable treatment afforded to PBK Architects W1-5B, Supporting
Burroughs
material
• Misuse/misappropriation of district funds
• Stacking projects to avoid Board approval process
• Ensuring vendor quotes were under $500,000 “to
15728 Pena W1-6, Complaint
subvert policy and Board”
• Attempting pass-throughs to unapproved vendor
instead of Board approved vendor
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According to Texas Education Code 44.031(a) all contracts, except contracts for the purchase of
produce or vehicle fuel, valued at $50,000 or more in the aggregate, for each 12-month period are to be
made by the method that provides the best value for the district. Among the nine options the law allows
school districts to use are competitive bidding, competitive sealed proposals, requests for proposals, and
job order contracts. The statute authorizes job order contracts for the “minor construction, repair,
rehabilitation, or alternation of a facility,” if the work is of a recurring nature but the delivery times are
indefinite and indefinite quantities and orders are awarded substantially on the basis of pre-described and
pre-priced tasks.
The following language from CVF (LEGAL) was extracted verbatim from Texas Government Code,
Section 2269.403:
“The district may award job order contracts for maintenance, repair, alteration, renovation, remediation, or
minor construction of a facility if the work is of a recurring nature, but the delivery times are indefinite and
indefinite quantities and orders are awarded substantially on the basis of pre-described and pre-priced
tasks. The district shall establish the maximum aggregate contract price when it advertises the proposal.
The Board shall approve each job, task, or purchase order that exceeds $500,000.”
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The Capital Improvement Department’s Use of Job Order Contractors
A separate report, which addresses process and control deficiencies the OIA identified in the Capital
Improvement Department, sets forth a number of reasons the job order contracting method was an
unsuitable choice for delivering the “best value” for the projects at issue in this case. (Exhibit W2-1)
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Additional information concerning the JOC procurement method is presented in Appendix A. This report
addresses fraud and financial impropriety.
Complaint from Former Capital Improvement Department Manager Zachariah Manning6
Manning claimed he was terminated as a direct result of a report he made to the Texas Education Agency
(TEA) in which he alleged that the CIP, namely Pena, avoided the competitive process by keeping each
purchase order from exceeding $500,000, when it was known in advance that projects would exceed that
amount. Manning specifically cited hail storm package 4 re-roofing projects as well as the “CO detector
project.” He also referred to “phasing” and “sequential billing” as methods used to avoid the competitive
process. (W1-1 and W1-1B, pg. 1, para. 2)
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Response to Manning’s Complaint to the Texas Education Agency
At Superintendent Michael Hinojosa’s direction, former Chief Financial Officer James Terry took charge of
preparing a response to Manning’s allegations. Terry collected responsive material from Chief Operating
Officer (COO)/Deputy Superintendent Scott Layne and then Procurement Services Executive Director
Kimi Tate. After a series of edits, made at Dr. Terry’s direction, Superintendent Hinojosa forwarded the
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final response to the TEA’s office of Complaint Management, Division of Governance and Investigation,
on November 18, 2016. The following excerpts summarize the substance of the response:
“The district financial statements are audited each year. As part of the audit, our procurement controls are
[reviewed]; and there have not been any [instances] of control deficiency in our procurement processes.”
6 After Executive Director Lauro Garza’s contact with the TEA in November 2016, the OIA closed its initial case file on
the matter. At that time the Division of Governance and Investigation was reportedly reviewing the district’s response
to the allegations.
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“After a review of the procurement files, including legal review, for package #4 roofing projects and other
procurement files for projects within the Capital Improvement Department, it was determined there was no
violation of CVF (LEGAL) 7 in avoiding competitive bidding or avoiding competitive sealed proposals...”
“All projects reviewed were below the $500,000 threshold, which is the legal limit before the approval of
the Board of Trustees is required by CVF (LEGAL).”
The response to the TEA included an attachment with information regarding the roofing projects; however,
it conveyed no specifics concerning any of the other projects or the basis on which the referenced legal
opinion was rendered and by whom. Email records revealed that Terry made a request for a legal opinion
directly to General Legal Counsel Jack Elrod, who indicated he would provide one. The OIA was unable
to locate a subsequent transmission of a legal opinion, however.
(W1-7, Memorandum to Complaint Management, Division of Governance, dated November 18, 2016)
A letter to Superintendent Hinojosa, dated December 6, 2016, advised of the TEA’s closure of the matter:
“We are in receipt of the district’s correspondence in response to the agency’s request for information…
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The agency has reviewed the documentation and determined that the district has addressed the reported
concerns that are within the scope of the Texas Education Agency.
This concludes the agency’s review of that matter and no further action or information is necessary at this
time.”
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(W1-8, Texas Education Agency response to the Dallas ISD)
Testimony of Chief Operating Officer/Deputy Superintendent of Operations Scott Layne
The response letter to the TEA was dated only several months after Layne’s arrival in the district. Below
are key excerpts from Layne’s statement:
“As to former Manager Zachariah Manning’s report to the Texas Education Agency (TEA), alleging the
Capital Improvement Department avoided the competitive process and engaged in other improper
practices, I have no first-hand knowledge on which to evaluate its legitimacy…
Pena seemed to have a legitimate explanation for the Capital Improvement Department’s splitting of
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projects into segments, with each linked to a separate purchase order in an amount below $500,000.
While these scenarios could give the appearance of an intentional circumvention of proper procurement
practices and/or the avoidance of the requirement to obtain Board approval, Pena’s explanation seemed
truthful. I did not believe there was any malicious intent on her part to circumvent the system. For this
reason, she completed her response draft regarding the allegation, which was sent to me and then
forwarded to CFO Jim Terry who was responsible for preparing the response…
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I only recall having one meeting with Pena and Burroughs regarding this matter. I believe I met with Mr.
Burroughs initially when the allegations came forth. Also, there was an initial meeting held with myself,
Jim Terry, Willie Burroughs, and Kimi Tate in Mr. Terry’s office when the allegations were received…
I do not remember many specifics regarding the significant revisions that occurred as a part of the final
document that went to Mr. Terry...
7 Per CVF (LEGAL): The district may award job order contracts for maintenance, repair, alteration, renovation,
remediation, or minor construction of a facility if the work is of a recurring nature, but the delivery times are indefinite
and indefinite quantities and orders are awarded substantially on the basis of pre-described and pre-priced tasks…
The Board shall approve each job, task, or purchase order that exceeds $500,000. Gov’t Code 2269.403.
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I…remember meeting with Kimi Tate…and CFO Terry, regarding the preparation of the response to the
TEA. According to email records, I called the meeting due to concerns about the process Tate proposed
for Procurement Services to more effectively monitor contracts and avoid project “stacking”. I no longer
recall the specific nature of the concerns I may have expressed at the time. I remember meeting with
them initially…and the comment being made that it appeared that stacking of projects occurred. In terms
of Procurement effectively monitoring the projects, my response was that I thought they were doing that
anyway, since all of the projects were cleared through their office before the work could commence.”
During the period in which the response to TEA was being crafted, I do not recall that there was any
formal review of the Capital Improvement Department’s job order contracts by Tate or anyone else in
Procurement Services. Further, I have no recollection of any consultation with Legal Services or the
receipt of any type of legal opinion concerning the matter.”
(W3-1A, Statement of Scott Layne, dated September 20, 2017, pg. 3, para 4, through pg. 4, para. 3)
Employee Status
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Pena resigned from her position in September 2017. She is reportedly employed at the San Antonio
Independent School District presently.
(W1-9, Oracle record) (W4-1, Statement of Sylvia Pena, dated September 8, 2017, pg. 1, para. 4)
Extent and Results of Investigation

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The OIA gathered and reviewed volumes of district and vendor records associated with CIP projects and
interviewed district employees and vendor representatives. The investigation revealed Manning’s
procurement related allegations to be substantiated.
False Information Submitted as Part of the District Response to TEA Inquiry
The information the district submitted to the TEA, in response to Manning’s complaint, was largely based
on narrative Pena contributed:
“The District has not intentionally kept [projects] under $500,000 to avoid procuring through competitive
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sealed proposals…”
“The Capital Improvement Department follows the laws, policies, and procedures for procuring goods and
services as established by the State of Texas, Texas Education Agency and the Dallas lSD Board of
Education. The allegation that employees avoided, circumvented, and otherwise attempted to operate
outside of established protocols is inaccurate and unsubstantiated.”
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“…Capital Improvement…has procured goods and services in compliance with established laws, policies,
and procedures.”
Appendix B is an analysis of CFO Terry’s crafting of the response to the TEA inquiry. Linked to it are the
multiple narratives Pena and Tate contributed, which Terry edited and combined with additional verbiage.
The above three statements, which Terry included in the final response, were identical to those contained
in Pena’s narrative contribution.
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Investigator’s Note: Terry cut language from Tate’s contribution. Below are abbreviated excerpts of the
language Terry removed, prior to submitting the final response:
“…Procurement Services…set up a contract management process within the districts ERP system –
Oracle. However, this process currently monitors the total spend authority and expenditures. It does not
monitor individual projects and what may be defined as ‘project stacking’8…
…to prevent project stacking…it is recommended to issue one AOW per campus/building organization
code per project…”
Texas Penal Code, Title 8, addresses the potential consequences of submitting false written statements,
for inclusion in the district response to the TEA inquiry.
Texas Penal Code, Title 8

Offenses against Public Administration
Chapter 37, Perjury and Other Falsification, Sec. 37.01
In this chapter, a "Governmental record" is defined as “anything belonging to, received by, or kept by government for
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information.” A "statement" means “any representation of fact.”
Sec. 37.10, Tampering with Governmental Record
(a) A person commits an offense if he:

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(1) knowingly makes a false entry in, or false alteration of, a governmental record;
(2) makes, presents, or uses any record, document, or thing with knowledge of its falsity and with intent that it be
taken as a genuine governmental record…
(5) makes, presents, or uses a governmental record with knowledge of its falsity…
(c)(1)…an offense under this section is a Class A misdemeanor unless the actor's intent is to defraud or harm
another, in which event the offense is a state jail felony.
(d) An offense under this section, if it is shown on the trial of the offense that the governmental record is described by
Section 37.01(2)(D), is:
(1) a Class B misdemeanor if the offense is committed under Subsection (a)(2) or Subsection (a)(5) and the
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defendant is convicted of presenting or using the record;
(2) a felony of the third degree if the offense is committed under:

(A) Subsection (a)(1), (3), (4), or (6); or
(B) Subsection (a)(2) or (5) and the defendant is convicted of making the record; and
(3) a felony of the second degree, notwithstanding Subdivisions (1) and (2), if the actor's intent in committing the
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offense was to defraud or harm another…
(g) A person is presumed to intend to defraud or harm another if the person acts with respect to two or more of the
same type of governmental records…
Analysis of Pena’s Statements
8A second version of Tate’s narrative referenced “perceived project stacking” as opposed to “project
stacking.” (Appendix B)
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Statement No. 1: “The District has not intentionally kept [projects] under $500,000 to avoid
procuring through competitive sealed proposals…”
Statement No. 2: “The Capital Improvement Department follows the laws, policies, and
procedures for procuring goods and services as established by the State of Texas, Texas
Education Agency and the Dallas lSD Board of Education. The allegation that employees avoided,
circumvented, and otherwise attempted to operate outside of established protocols is inaccurate
and unsubstantiated.”
Statement No. 3: “…Capital Improvement…has procured goods and services in compliance with
established laws, policies, and procedures.”
There were many Capital Improvement projects with associated costs in excess of $500,000. The
evidence shows she did, in fact, structure purchases to avoid the competitive process. This was well
known to those who worked in her department.
Jermauld Cobbs, who reported to Pena during her entire tenure at the district (first as a facilities planner,
then as a project manager beginning in April 2016), said he had understood, based on what Pena said,
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that $500,000 was the largest amount that could be spent on a JOC.
(W5-1, Statement of Jermauld Cobb, dated September 21, 2017, pg. 1, paras. 2 & 3 and pg. 2, para. 3)
Michael Smith, a former roofing department employee, said Pena limited the scope of work associated
with roofing projects, with the goal of keeping each below $500,000. He recalled that Pena commented
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on multiple occasions that it takes two years to “bid a job.” Based on his extensive experience in the
roofing industry and the bidding process, Smith said he knew that not to be the case.
(W6-1, Memorandum of Phone Conversation, dated October 2, 2017, pg. 1, para. 1; pg. 2, para. 2; and
pg. 3, para. 2)
Todd Walker, a former facility planner who specialized in roof remediation, said his discomfort with the
way Pena did business caused him to leave his employment at the district. According to Walker, Pena told
him they would be using JOCs only, which meant they could spend no more than $500,000 on any given
project. Otherwise, according to Walker, the projects would have had to be “put out on the street” for bid.
Walker added that Pena split projects into phases, to keep each purchase order under $500,000. 9
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(W7-1, Memorandum of Conversation, dated October 11, 2017, pg. 1, para. 2 through pg. 2, para. 2)
Skye Building Services Operations Manager James Sutherland and senior project manager Ehli
Remmers also advised the OIA that it was their understanding the district had a $500,000 limit (“cap”) on
purchase orders. They referred to it as the “cap”. Neither had any recollection of a district purchase order
ever exceeding that amount.
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(W8-1, Memorandum of Interview, dated August 8, 2017, pg. 3, para. 2)
(W-9, Corinne Berti-Craig
The OIA’s Interview with Pena
In response to questions concerning whether she structured projects to keep corresponding purchase
orders in amounts below $500,000, to circumvent the competitive procurement process and/or to avoid
9 Walker specifically named the Longfellow and Gooch projects as examples (W7-1, pg. 3, para. 2)
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obtaining Board of Trustee approval, Pena stated, “No, that was not the intent.” She further stated the
following:
“It is an industry practice to have an established budget and scope of work reconciliation. When a scope
of work exceeds the budget allowed, then the option is to ‘value engineer’ the project to be able to move
forward. The discussions on revising scope of work were discussed in length with Maintenance Roofing,
architects, and contractors. All awarded contracts were structured in that way. The parameters for utilizing
job order contracting for this program was to do as much remediation work as feasible with the time
constraint that we had…”
“We worked within the established parameters as set forth by Board policy as interpreted by [the] Dallas
ISD Procurement Department. All awarded contracts were reviewed and vetted through that department.”
(W4-1, pg. 4, paras. 2 through 5)
Procurement Services Directive to Seek Board Approval
Relative to multiple transactions in the latter part of 2016 forward, Pena received clear and appropriate
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direction from Procurement Services. For example, in October 2016, Procurement Services Buyer Robbie
Daniels sent Pena a message that opened with, “The attached request has been rejected because this is
considered sequential purchasing.” Following other similarly themed communications, the Procurement
Services Director of Operations wrote the following in an April 6, 2017, message to Pena: “…you cannot
break purchases apart just to get stuff done faster.”
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(Sub-Appendix B-2, pgs. 3 through 5)
Limit on Purchase Orders and/or Job Order Contract Amounts
Pena may have incorrectly believed JOCs could not exceed $500,000. When the OIA asked her whether
she understood $500,000 to be the threshold requiring the engagement of the competitive process or just
the point that triggered the necessity to obtain Board approval, Pena said a project costing more than
$500,000 had to be procured competitively.
(W4-2, Memorandum of Interview, dated September 7, 2017, pg. 3, para. 4)
“Package 4” Roofing Projects

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Sub-Appendix B-1 contains information and references to supporting evidence of Pena’s untruthful
statements, in response to the TEA inquiry, particularly statement 1, “The district has not intentionally kept
[projects] under $500,000 to avoid procuring through competitive sealed proposals.” The evidence shows
Pena did, in fact, structure “package 4” roofing projects to avoid the competitive process and the Board
approval process. Multiple witnesses observed this and expressed their discomfort with it.
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Pena exaggerated the time constraints she claimed made it necessary to use JOCs. She actually had
over a year to navigate the competitive process to get top priority roofing jobs completed. Even after
projects sat idle for months, she theoretically had time to put them out for bid.
Pena disregarded the original plan the roofing department set in motion for “package 4”10 which was to
budget for actual needed repair work on all the affected schools (hail damage and non-hail related roof
defects) and bid out and complete as much of the work as possible with the insurance proceeds. The
remaining schools were to be “deferred or worked into the 199 budget.” In Pena’s words, she instead
“redistributed funds across the board for the top 8 schools in need.”
10 The former acting CIP director, Erik Ziller, informed Pena of the prior plan.
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(Sub-Appendix B-1, pgs. 2 & 3)
The below table shows Pena’s redistribution of funds, as compared to Project Manager Manning’s
November 4, 2015, proposal:
Manning’s
Pena’s Contract
Proposed Professional
Amounts Pena’s
Contract Services Total per
School (including Professiona Pena’s Totals
Amts. (Architects & Projects
Name contingencies l Services Per Project
(including Roofing
& asbestos Amounts
contingencie Consultant)
abatement)
s)
Kramer $ 472,064.34 $ 53,000.00 $ 525,064.34 $ 488,724.14 $111,073.67 $

599,797.81
Frazier $ 370,263.34 $ 41,000.00 $ 411,263.34 $ 484,367.26 $110,083.47 $

594,450.73
Lipscomb $ 130,920.79 $ 14,000.00 $ 144,920.79 $ 485,506.38 $110,342.36 $
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595,848.73
Preston $
$ 47,015.92 $ 5,000.00 $ 52,015.92 $ 400,414.01 $ 91,003.18
Hollow 491,417.19
Hillcrest $1,939,576.72 $215,000.00 $2,154,577.72 $ 484,000.00 $110,000.00 $
Wilson $ 804,839.68
AF $ 85,000.00 $ 889,839.68 $ 482,968.36 $109,965.54
594,000.00
$
592,733.89
Mata $ 222,765.61 $ 25,000.00 $ 247,765.61
Wheatley $ 6,801.87 $ 1,000.00 $ 7,801.87
Dunbar $ 479,482.19 $108,973.23 $

588,455.42
Rogers $ 343,373.73 $ 78,039.48 $

421,413.21
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Subtotals $3,994,248.27 $439,000.00 $4,433,248.27 $3,648,836.07 $829,480.93 $4,478,116.98
3rd
Party
Roof $ 46,500.00 $ 46,500.00
Consultant
Services
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Total $3,994,248.27 $485,500.00 $3,648,836.07 *$829,480.9 $ 4,478,116.98

$4,479,748.27
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*Pena’s total for professional services was miscalculated by $200.01 ($929,480.93 - $829,280.92). The error carried
over to the grand total amount.
Investigator’s Notes: Pena’s projected professional services amounts were nearly double Manning’s.
PBK Architects’ fees associated with four of the projects totaled approximately $264,926.11 Alliance did
11 Dunbar, Mata, Kramer, and Hillcrest
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the architectural work for the other four package #4 roofs, 12 at a cost of $256,802. The two purchase
orders for architectural fees totaled $521,728, which included $40,000 for asbestos abatement
(“reimbursable PSI fees”) and $40,000 for “reimbursable Dry Tech fees. The district paid the full $521,728.
(Sub-Appendix B-1, pg. 3)
Section 2269.403:
Even based on the total job costs reflected in Pena’s plan, Board approval was required for most of the
re-roofing projects. None was ever brought to the Board, however.
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Michael Smith, currently the manager of the NE Maintenance Department, is a former roofing department
employee with knowledge of the “package 4” roofing projects. He confirmed his involvement in the
prioritization of the “package 4” re-roofing projects. While he no longer had access to the records
associated with the roofing projects, he said he had been on each school’s roof multiple times. Thus, he
had first-hand knowledge of their condition and the level of remediation achieved through the job order
contract work completed.
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He recalled having several face-to-face meetings with Pena regarding these projects, typically in the
office of Cesar Villarreal, who was Smith’s supervisor prior to his promotion and remains his supervisor
presently. Smith added that Todd Walker would have attended some or all of these meetings; and
Jermauld Cobbs sometimes attended. When asked if he recalled any “package 4” related meetings in
which Risk Management also participated, Smith said he did not.
From memory, Smith described multiple schools with heavily damaged or completely “totaled” roofs,
which only received a fraction of needed repairs. Hillcrest and Wilson High Schools are prime examples.
On the other end of the spectrum, Smith advised that Lipscomb Elementary had two roofing systems prior
to the storm. The insurance company determined that the tar and gravel portion of the roof was not
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damaged, while the “PUF” part was “totaled”. While the tar and gravel roof on the upper level of the main
building (3rd floor) was not deemed to have been damaged, Smith said it was replaced with a “PUF”
roofing system.
It was Smith’s observation that Pena limited scopes of work, with the goal of keeping each below
$500,000. He recalled that Pena commented on multiple occasions that it takes two years to “bid a job”
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Based on his extensive experience in the roofing industry and the bidding process, Smith said he knows
that not to be the case.
(W6-1, Memorandum of Conversation, pgs. 1 through pg. 3, para. 2)
Investigator’s Note: For Hillcrest and Wilson High Schools, the architectural drawings show a substantial
portion of what Smith said required re-roofing was outside the scope of the work for these projects.
(W1-13, pgs. 14 & 15) (W1-14, pg. 10)
Cost Per Square Foot Comparison
12 Rogers, Lipscomb, Preston Hollow, and Wilson
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Relative to the “Package 4” projects, Smith opined that roofing costs per square foot seemed to be out of
line. He cited $16.50 as what he would consider a reasonable market rate for roofing, third party
consulting and oversite, and associated design fees. Smith commented that Lipscomb is an example of
a job for which the price per square foot was unreasonably high in his view.
(W6-1, pg. 3, para. 5)
A review of available cost per square footage data revealed “package 4” projects completed via the JOC
method were more costly than the competitively bid package 3 projects. Among the package 3 projects,
the Caillet Elementary had the highest per square foot cost of $15.65. The package 4 Lipscomb, Wilson,
and Rogers projects ranged from $29.99 to $35.76 per square foot.
(W1-16, Summary of Package 3 & 4 Project Costs with supporting documentation)
Timeliness of Completions
In spite of the time constraints Pena said necessitated the use of JOCs, all of the “package 4” re-roofing
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projects far exceeded the June 30, 2016, deadline. According to the associated work orders, none was
even completed in calendar year 2016. They were all completed between February 16 and September
19, 2017.
(Sub-Appendix B-1, pg. )
Phasing
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While not part of “package 4”, Smith commented about the Longfellow project, which he cited
as an example of the waste that was prevalent in the Capital Improvement Department under
Pena’s leadership. According to Smith, the entirety of the needed work was priced at
approximately $1 million. Instead of engaging the competitive bidding process, Pena divided the
project into three phases with an aggregate cost of $1.5 million (including the addition of
mechanical equipment replacement to the scope of work).
(W6-1, pg. 3, para. 3)

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District-wide Carbon Monoxide Detection System Installation Project
Sub-Appendix B-2 contains in-depth information, including email communications, concerning the 3-year-
long, districtwide carbon monoxide detection system installation--a “stacked” project that ultimately cost
approximately $4 million. It also involved unauthorized procurements, with Pena’s knowledge and
consent.
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An incident at Lakewood Elementary that garnered public attention triggered the initiation of this project,
which the Board of Trustees approved, with an associated cost of $1.5 million, on May 28, 2015. At the
time of the Board’s approval, however, there were 12 requisitions and purchase orders associated with
the carbon monoxide detection system installation that collectively exceeded $2.5 million. (TWO SEP
BUDGET SOURCES)
Procurement Services Directive to Seek Board Approval of the “Phase II” Panel Upgrade
In response to Jermauld Cobbs’ October 20, 2016, submission of a procurement package for the
installation of stand-alone security panels, Senior Buyer Robbie Daniels sent the following message to
Cobbs, with copies to Pena and others:
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“The attached request has been rejected because this is considered sequential purchasing. Sequential
purchasing means purchases, over a period, of items that in normal purchasing practices would be made
in one purchase. Sequential purchases is a violation of Local Government Code Section 252.062 and
Education Code 44.031. Also, per CVF (LEGAL) the Board shall approve each job, task, or purchase
order that exceeds $500,000 for JOCs per Gov’t Code 2269.403.
Purchase order 589734 was generated for Skye Building Services in the amount of $469,866 for
Southwest quadrant ES. The attached request is for ‘Phase II’ for additional install for security panels, key
pads, and remote modules for Southwest ES for Skye Building Services in the amount of $59,279.26.
Bringing the total amount of the project to $529,145.26.
Please prepare your paperwork to take this project to the Board as per the CVF (LEGAL).”
That evening, Kimi Tate sent the following message to Burroughs, with a copy to Pena:
“…Here’s what I know about the CO2 projects...It was decided by your team that each of the projects
listed above were separate projects…If you are now saying that all…are one project…then we certainly
may have a problem because the costs exceed $2,000,000…and should be ratified by the Board.
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Work Completed Without Purchase Orders
On December 8, 2016, Phillips-May project manager Will Conley sent the following email messages:
“…Per our conversation after the meeting today, all work is suspended until LMC and DMI receive POs.
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The cost of the 15+/- sites that have new panels will be compensated using the new PO to LMC. This PO
will also cover cost to install the new panels as needed for the original contract. GC will use the remaining
contingencies in each contract to cover the extended contract time.”
“…PMC has not billed for any additional cost to date. We have only reached an agreement today after the
OAC meeting.”
According to project manager Jermauld Cobbs, this post-OAC meeting was between Pena and Conley
behind her closed office door. He further advised that Pena and Conley often met one-on-one in Pena’s
office.
Cobbs said everyone who attended the weekly team meetings was aware the project funds had been
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exhausted. Pena made that clear to all; yet she strongly pushed for the installation of the stand-alone
security panels at four pilot schools, knowing available funding would not cover the cost. Cobbs further
said it was Pena’s standard operating procedure to cover a funding shortage on a purchase order with
available monies from another purchase order.
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The following email chain, with the subject line “CO PANEL UPGRADE PO” further shows work on
“Phase II” completed without a purchase order in place:
Date Sender Recipient Excerpt from Message (un-corrected)
Jessica Snow,
Operations “Please update on the status of this PO as we are 2 months
12/20/2016 Pena
Manager, LMC into the work and have occurred over 20k in cost thus far.”
Fire & Security
12/20/2016 Pena Snow “Cease work until this has been resolved.”
“Work has already been 95% completed for all Skyes’

schools, for which this cost has been occurred.
By ceasing work this would include cutting off all starlink

communication and remote monitoring effecting PBK testing,
12/20/2016 Snow Pena
existing schools placed online and put a complete holt to this
project as of today.
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Please confirm and acknowledge that this will heavily impact
the completion of this project.”
“Please confirm decision on below as SKYE is expecting to

get PBK testing completed on attached schools tomorrow.”
12/21/2016 Pena
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“Please advise…under PO589264 see the current account
balance for LMC. We have room on your purchase order. Why
is this an issue?
“This PO was issued for programming only. If we were to use

this PO it would look like we are billing the same schools
previous billed twice. This is going to be an accounting
nightmare and not a road LMC wants to travel.”
“I understand…however, if LMC does not want to use this

12/21/2016 Pena Snow
purchase order then we cannot move forward.”
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The following day, December 22, 2016, purchase order 637394 was issued directly to LMC. An
associated $365,210.56 AOW is linked to LMC’s master agreement dated August 22, 2013, for fire alarm
inspection, maintenance, and repair. The entire SOW is associated with the carbon monoxide detection
system installation, however.
Portable Relocation and Wheelchair Ramp Installation Projects

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Sub-Appendix B-3 contains detailed information and evidence concerning Pena’s actions associated with
portable classroom and wheelchair ramp installation related projects. Her structuring of unauthorized
procurements associated with the relocation of a portable classroom building to Sanger Middle School,
again showed Pena operated outside of “established protocols”, policy, and the law, rendering her
statements in response to the TEA inquiry untruthful.
On August 27, 2015, the Board approved the awarding of a contract to Solar Systems, Inc., DBA McMillan
Movers (McMillan Movers) for the “relocation of portable/modular buildings to include the purchase,
construction and/or relocation of steel ramps and modular stairs.” Pena, Burroughs, and Chief Operating
Officer (COO) Wanda Paul signed the master agreement in August 2015. McMillan Movers, the only
company that submitted a proposal in response to the 2015 Request for Proposals (RFP) is the district’s
sole awarded supplier for these services.
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Neil and Karen McMillan, owners of McMillan Movers, told the OIA they had some in-progress work, in
which they were already engaged when Pena arrived in the district. Their local company received little
additional business while Pena was in charge of the Capital Improvement Department. They provided
records in support of their contention that they spent many hours assembling quotes for jobs they never
got, in spite of their status as the only district approved vendor with a master contract to move portable
classrooms and install associated wheelchair ramps. In some cases, according to Mrs. McMillan, they
were given impossibly short deadlines to submit quotes. Mr. McMillan said they felt as though the district
was trying to get rid of them.
Relative to the relocation of a portable classroom to Sanger Middle School and the related installation of
wheelchair ramps, McMillan Movers was assigned as a subcontractor of Skye Building Services. In June
2015, the district issued two assignments of work (AOW) totaling $451,992 for this project:
Unauthorized Procurement No. 1
James Sutherland, Skye Building Services Operations Manager, provided the following timeline of events,
along with supporting records:
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Date Event
“With the project approval being delayed (due to permitting) we submitted costs for
July 25, 2015
accelerated schedule.”
“DISD decided to complete the ramps themselves, and the accelerated schedule proposal
August 13, 2015
August 18, 2015
September 23,
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was revised.”
“Assignment of Work was issued.”
“We were asked to write the 9/23/17 letter…as an explanation/attachment to the billing, when
2015 it was noted that a purchase order would not be issued for the accelerated costs.”
Investigator’s Note: The $113,867 assignment of work attached to Sutherland’s email communication,
dated August 18, 2015, contains no signatures. It shows it was for “Phase 3”.
Sutherland’s correspondence to Cobbs, dated July 25, 2015, stated in part:

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“We are attaching the cost proposal to accelerate the work and to incorporate all city changes for the A.
Sanger portable project. The total cost of these changes is $179,375 as detailed in the attached cost
spreadsheet. We have also attached all subcontractor backup proposals…We have proceeded with the
work, based on DISD direction and assurances, and request that a purchase order be issued for this
additional work.”
“Please confirm DISD’s direction and course of action for guaranteeing payment?”
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The following is an excerpt from Sutherland’s August 13, 2015, correspondence to Cobbs:
“We have accelerated all trades as requested, working seven days per week, and a minimum of twelve
hours per day endeavoring to complete the Sanger modular building by August 24, 2015. The total cost of
this additional work as we know it to date is $103,515, as detailed in the attached breakdown sheet.
Please issue a change order to enable us to bill for this work in the month of August.
This proposal supersedes our previous proposal dated July 25, 2015 due to the revised scope.
Specifically, the handicapped ramps and all covered walkways are removed from our scope…”
“Work Specifically Excluded:
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1. Skirting around base of portable

2. Joist replacement below modular trailer
3. Handicapped ramps
4. All walkway and sidewalk canopies”
Investigator’s Note: The AOW included a $10,352 contingency fee, in addition to the $103,515 scope of
work, per Sutherland’s August 13, 2015, correspondence.
According to the Purchasing Manual in effect at the time of this transaction, a contingency is “a possible
future event or condition arising from presently known or unknown causes, the outcome of which is
indeterminate at the present time.”
The September 23, 2015, letter received from Sutherland was not in the district records the OIA obtained.
Instead, the file contained a nearly identical letter, dated September 24, 2015. With it was the “cost
backup” showing a grand total of $113,867 for Phase 3. A revised scope of work revealed tasks assigned
to McMillan Movers, which had previously been removed, were added back—to the extent covered by the
$10,352 contingency fee.
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Per CV (LOCAL):
…The contingency allowance is to be used only for expenditures that do not require a change order.
The contingency allowance may be used to pay for changes in the work, including but not limited to those
resulting from hidden or unforeseen conditions. The contingency allowance may be used to pay claims.
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Use of the contingency allowance must be authorized in advance by the Superintendent of Schools or
designee.
…Change orders shall be used to document any change in contract time or contract sum, or any
material change in scope of work.
For construction contracts valued at $50,000 or more, the following approval process shall apply. If a
change order is the result of a hidden or unforeseen condition, force majeure, code interpretation or for a
savings in cost, the Superintendent of Schools or designee is authorized to execute the change order,
transfer the necessary funds, and submit the changes to the Board for ratification. Any other change order
must be approved by the Board prior to any work covered by the proposed change order or change in the
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approved plans.
Unless waived by the Board, if the change order(s) would increase the value of the contract by more than
25 percent, the change order shall be submitted to separate competitive procurement.
To pay Skye Building Services’ $113,867 invoice, dated September 28, 2015, Pena and ED Burroughs
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signed a Request for Checks for Unauthorized Transactions form. The Chief/Deputy Superintendent
signature line, dated October 14, 2015, appears to contain the illegible signature of former COO Paul.
The form indicates appropriate action was taken per Regulation DH. The district issued the $113,867
payment on November 2, 2015. (FOR FOLLOW-UP WITH ACCOUNTS PAYABLE.)
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Per Policy DH (LOCAL): Employees entering into unauthorized procurement transactions may be
personally liable and subject to disciplinary action.13
Employees whose actions result in a ratification of funds to be taken to the Board for review and possible
action may be subject to the following disciplinary actions depending upon severity: 1) Additional training;
2) Letter of concern; 3) Reprimand; 4) Restitution; and/or 5) Termination.
Exceptions may be made to this regulation by the Superintendent of Schools or designee.

DH (REGULATION)14 (Board Policy Update Detail Page)
Wheelchair Ramps Associated with Sanger Portable
Due to the elevation of the building, the wheelchair ramp McMillan Movers installed became substantially
more costly than initially expected. Karen McMillan, company President, explained that the added cost
was necessary for the ramp to meet Americans with Disabilities Act (ADA) requirements.
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Because the added expenses caused the total project cost to exceed the $500,000 “budget” for the JOC,
“work got ahead of the change orders,” according to Mrs. McMillan. Because she and her husband Neil,
co-owners of the company, understood the urgency to finish prior to the start of school in August, they
continued without a purchase order.
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According to Mrs. McMillan, Pena told them and James Sutherland that she was going to have to take
funds from “here and there,” to pay for the project. Mrs. McMillan said everyone knew Pena was
operating outside of procurement protocols. She added that Sutherland specifically asked Pena whether
her payment solution would “withstand an audit.” Ultimately, it took four to six months for McMillan Movers
to receive full payment for the work, part of which came directly from the district rather than Skye Building
Services.
An AOW to McMillan Movers, which appears to bear Paul’s signature, dated September 2, 2015, was
forwarded to Procurement Services on September 23, 2015. With an effective date of September 14,
2015, the AOW showed that it amended the August 28, 201515, professional service contract between
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McMillan Movers and the district. The scope of work (SOW) was the installation of “a wheelchair ramp on
quad portable building #505” at Sanger Elementary. An associated $51,144.75 estimate, dated
September 9, 2015, matches the AOW amount.
A MaintenanceDirect form showed the project status as “work in progress.” Based on the testimony of the
McMillans and Sutherland, that entry was not accurate. The work had already been completed.
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The AOW and the associated paperwork did not reveal the fact it was an unauthorized procurement.
Further, because the AOW was associated with the McMillan Movers master agreement, rather than the
JOC to which the project was assigned, it may not have been apparent to Procurement Services that it
represented an expansion of a project that required Board approval.
13This policy has been in place since at least November 25, 2015. (Board Document, dated April 28, 2016, amending
DH (LOCAL))
14 This regulation was last updated September 14, 2017. (Board Policy Update Detail Page)
15The referenced contract was not in effect at the time the McMillan Movers actually performed the work on the
Sanger project.
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A second procurement request, “for Solar Systems, Inc. d/b/a Neil McMillan Movers” to accelerate the
work schedule, at a cost of $16,181.50, bears the signatures of Pena and Burroughs—both dated
September 15, 2015. The associated MaintenanceDirect form also inaccurately showed the project status
as “work in progress.”
Investigator’s Notes:
The associated estimate for this work was dated September 11, 2015. Further, the narrative under the
description of the work was written in the past tense.
The project cost increased by a total of $181,192.90 ($113,867.00 + $51,144.75 + $16,181.15) or

approximately 40% above the aggregate Skye Building Services contract amount of $451,992.00. In
addition, it appears there was another purchase order associated with the Sanger project, number
573601 issued to Terracon Consultants, Inc., for $2,155.
( )
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Per Board Policy CH (LOCAL): Purchases and services performed without an authorized transaction
(valid purchase order, check request, etc.) shall be considered unauthorized transactions made without
the consent of the Board.
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All unauthorized transactions shall be reported to the chief financial officer. Anyone creating or authorizing
such a commitment may be personally liable for payment of such agreement. The Board may ratify any
otherwise unauthorized transaction…Employees who fail to follow established administrative procedures
shall be subject to disciplinary action.
Vendors and potential vendors delivering or attempting to deliver goods and services without an
authorized transaction are in violation of district policy and shall not be paid or reimbursed for any good or
service not requested through an authorized transaction.
Pena’s Attempts to Direct Business to Non-Awarded Vendors

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Both the 2015 and 2016 Purchasing Manuals state that the end-user “shall” use awarded suppliers to
procure goods and services. Per the Glossary of Terms: “An ‘awarded supplier’ is a supplier that has
been awarded a bid/proposal through the Dallas ISD competitive procurement process or through a
cooperative purchasing program with an inter-local agreement.”
Non-Awarded Supplier Sapa Extrusions, LLC, DBA REDD Team

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Instead of using awarded vendor McMillan Movers to do wheelchair ramp installations, on multiple
occasions Pena selected the non-Texas based Sapa Extrusions, LLC, DBA REDD Team (REDD
Team)16—a non-awarded supplier. Pena arranged for REDD Team to serve as a subcontractor under job
order contractor (JOC) Phillips-May. In this case, the JOC served as a means to use the services of the
non-awarded vendor.
A January 11, 2016, entry Cobbs made in his journal showed Pena’s intention with regard to the awarded
vendor:
16REDD Team has no physical office in the State of Texas; although multiple district employees understood the
company had ties to the Houston area. (W5-2, pg. 2, para. 2) (W14-1, Adame)
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“In my office Sylvia gave directive to stop using Solar Systems, Inc. Question was asked, by her, ‘How do
we do this?’ My answer was, ‘I don’t know, just stop giving them work, I guess.”
(W5-4, pg. 1, numbered para. 3)
Installation of Wheelchair Ramps at Daniel Webster and Macon Elementary Schools
On August 17, 2016, Gregory Oslin, Account Executive, REDD Team by SAPA, submitted quotes and
drawings for the ramps, decks, and steps for Webster and Macon Elementary Schools to Phillips-May
project manager Joseph Siragusa. The total quote was $24,521.0017, based on building No. 708 option
one. Pena received the quotes from Robert Adame the same day with the following message:
“Attached are REDD Team’s quotes. Joe Siragusa of Phillips/May stated that he needed to add his costs
and resubmit. I will keep you posted as progress develops.”
Joseph Siragusa, Phillips-May Project Manager
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At least as far back as October 2, 2015, Siragusa worked for Parsons, as a Dallas ISD Bond Program
project manager. He had a contractor number and a Dallas ISD email address. He became a project
manager for Phillips-May on approximately February 28, 2016. On September 16, 2016, while involved in
planning for the Phillips-Mays JOC assignments relative to the ramp system installations at Webster and
Macon Elementary Schools, Siragusa and his wife formed a project management business, Iron Lock
Construction Services, LLC. They operate the business from their residential address; but use a post
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office box for business mail. Public records indicate Siragusa and his wife are the only company
employees.
On August 26, 2015, McMillan Movers submitted estimates for the Webster ramps: $47,838 for portable
#522 and $41,582 for #708. Later, in December 2015, McMillan Movers submitted a revised quote for the
Webster ramps. The estimate and related drawings show a scaled-down version compared to the August
quote: an aggregated cost of $44,135.52 for both ramps.
The McMillan’s December 2015 quote was $19,614.52 18 above the REDD Team estimate. Making a value
comparison is difficult, however, due to differences in the ramp designs—especially for portable building
number 522. Further, REDD Team did not break its quote down by line item like McMillan Movers did.
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Apart from the ramp material and installation, the REDD Team quote did not appear to include all the
products and services the McMillan quote did. For example, the McMillan quote included removal of
existing canopies and installation of new or used canopies for $4,484 as well as job site clean-up. It also
ncluded concrete work with an associated cost of $1,250.00 and a payment bond for $1,697.52. Adjusting
for these few items, none of which is referenced on the REDD Team quote, reduced the cost difference to
$12,183 ($44,135.52 less the sum of $4,484.00 + $1,250.00 + $1,675.52). In addition, as stated in the
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email communication, the Philips-May costs had yet to be added.
Months later, after repeated attempts to get ramps for four wheelchair bound students, Webster
Elementary Principal Clement Alexander, Jr. contacted COO Wanda Paul on February 9, 2016. In
response to Alexander’s plea for help in accommodating the students, Pena wrote the following:
“…We have had quite a few requests districtwide on ramps for existing portables in the last couple of
months. These are services that require vendor proposals as well as allocation of funding sources. Right
17 $10,160.00 + $14,361.00 = $24,521.00
18 $44,135.52 - $24,521.00 = $19,614.52
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now we are in the midst of writing a protocol on how best to handle the available resources that we have
in the most expedient manner.”
We are moving forward to have a site evaluation done…to ascertain if the existing space at the main
campus can be utilized. In the meantime we are reviewing multiple options with our in-house
representatives on how best to address your requests.
Mr. Cobbs will be scheduling a meeting with Ms. Christian in the next 10 days on evaluating your campus.
From Ms. Christian’s recommendations, we will move forward with either renovating the quads for interior
access to…existing ramps or fabricating the ramps in-house...”
Investigator’s Note:
There was a master agreement in place for McMillan Movers to provide these services. Further, Pena’s suggestion
that the project was not funded was also inaccurate.
On February 2, 2016, Cobbs sent Pena a Pending Contracts in Process spreadsheet showing a $48,549.07 contract
amount for the Webster ramp installations. It listed the contractor as Solar Systems, Inc. (McMillan Movers) with a
funding source of 199-51-6624-3G-961-X99. A notation for this and other ramp projects read, “Revisiting contract.”
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It ultimately took approximately 14 months for the principal to obtain the needed ramps for the wheelchair bound
students. The Maintenance Department delivered them, however—not the Capital Improvement Department.
On October 10, 2016, Cobbs transmitted assignments of work and related documents for Phillips-May to
“provide all labor, materials, and equipment to remove four sets of existing stairs with platforms, install two
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new aluminum ramp systems, install two new aluminum stairs with landings on quad portables #522 &
#708…” The basic fee was to be $31,333.00 plus a contingency fee of $3,133.30 for a total of
$34,466.30. The drawings for the aluminum ramp systems show Sapa Extrusions, LLC, REDD TEAM,
prepared them.
SMALLER THAN THE AMOUNT PREVIOUSLY QUOTED??
Based on the dates on the paperwork, Procurement Services Senior Buyer Robbie Daniels suspected the
work had already been completed. Daniels contacted the Webster Elementary office manager, who
confirmed two ramp systems had, in fact, been installed on portables (#522 and #708) the prior week.
Daniels obtained photos of the ramps from the school. The following is an excerpt from Robbie Daniels’
statement:
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“...I emailed Ms. Tate to notify her of what I found. Tate came to my office and directed me to move
forward with routing the paperwork; but she told me not to approve the requisition when Pena submitted
it…”
According to Daniels, Pena subsequently told her the ramps were “done internally.” Pena reportedly did
not respond to Daniels’ follow-up question as to why she submitted an AOW for Phillips-May to do the
work.
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Work order number 587509, created on September 21, 2016, and assigned to Carpentry, shows
“installations” of “wheelchair ramp on portable.” The work was reportedly completed on October 17, 2017,
at a cost of $5,908.57. The work order further noted, “salvage materials.” The OIA confirmed the portable
numbers 522 and 708 were erected from salvaged materials.
(W5-3, Email from Cobbs with attached photographs)
When shown a photograph of the recently installed repurposed steel ramps at Webster Elementary,
Karen McMillan identified them as those McMillan Movers sold to the district in the past. According to Mrs.
McMillan, reusability is a key feature of their steel ramp systems. The wheelchair ramps they install are
attached to portable classrooms, which are designed to be temporary structures. Thus, she explained that
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the ability to remove them from one portable, reconfigure them, then re-use them on another portable
makes them a good investment for the long-term.
(W14-1, )
Attached is a presentation of the above described events, specifically related to the Webster ramp
installation project, in the format of a timeline. (W1-22)
Relative to the Macon Elementary project, the Procurement Services Department received an AOW
showing a basic fee of $20,333 plus a contingency fee of $2,033.30 for a total of $22,366.30, which was
consistent with the Phillips-May cost proposal dated August 17, 2016. Pena signed the associated
purchase requisition on October 10, 2016; and Burroughs signed it the following day. The scope of work
called for Phillips-May to remove four sets of existing stairs with platforms, install two new aluminum ramp
systems and two new aluminum stairs with landings on quad portable numbers 925 and 939. Again, the
associated drawings of the ramp systems to be installed showed the REDD Team prepared them.
From the NE Maintenance Department, the OIA obtained copies of work orders for ramps internal
craftsmen built at Macon. According to Michael Smith, Manager, NE Maintenance, internal carpenters
installed wooden ramp systems for portable building numbers 925 and 939 “from scratch,” with materials
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purchased from Lowes. The ramp connected to building number 939 was reportedly completed on August
11, 2016; and the other on August 20, 2016. The associated costs were $3,640.67 and $3,398.25,
respectively.
Phillips-May Project Manager Siragusa’s Pursuit of District Work for Iron Lock Construction
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Iron Lock Contract Wylie ISD for JOC Services
According to former CIP specialist Robert Adame, the Capital Improvement Department used Iron Lock in
a similar manner as the JOCs. Adame said Siragusa and Gary LNU19 conducted walk-throughs of ramp
project sites. Gary prepared the estimates; Siragusa “went along.”
(WXX-X, Memorandum of Interview with Robert Adame)
Procurement Services records show Iron Lock Construction was awarded a contract with Wylie ISD, to
provide job order contracting for minor construction trades, from June 20, 2017 through June 1, 2018. In
response to the Wylie ISD Bid No. 2017-M003, concerning past project experience, Siragusa listed only
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Dallas ISD projects he handled while “serving as project manager with previous employer prior to
formation of Iron Lock Construction Services, LLC.”
Attempted Award of Project to Iron Lock – Installation of Wheelchair Ramps at Seagoville High
School
A purchase requisition request package, dated January 23, 2017, documents a project that was planned
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for Iron Lock Construction Services. The AOW, shows the contract amount was to be $24,513.87 for the
installation of aluminum ramps on portable classroom numbers 576 and 1775 at Seagoville High School,
in accordance with the attached proposal dated January 2, 2017. The related drawings showed REDD
Team prepared them.
The referenced cost proposal states the scope of work was to include the following:
• Selective demolition of the existing two wooden ramps and storage for pickup by Dallas
Independent School District Maintenance Department
• Installation of two (2) new ADA compliant aluminum ramps
19 Last name unknown
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• Installation of new concrete as needed from existing sidewalks to new ramps
The selective demolition of the existing two wooden ramps is not shown on the AOW, the Purchasing
Acknowledgement and Routing Form, or the Purchase Requisition. Photographs included in the
procurement package show portable classroom building numbers 576 and 1775, with the referenced
wooden ramps matching those obtained from Smith.
Months prior, in October 2016, the Maintenance Department installed wheelchair ramps on portable
classroom buildings 576 and 1775 at Seagoville High School. Email communications show Pena was in
the direct line of communication concerning the Maintenance Department’s construction of these ramps.
Investigator’s Note: At the time the above referenced requisition request package went to Procurement
Services, Siragusa was still in the employ of Phillips-May as a project manager. Shortly thereafter, in a
February 23, 2017, email message to Pena, Siragusa stated, “As of today 25 January 2017, I am no
longer an employee of Phillips-May.”
According to Adame, Pena knew of the installation of the wooden ramps. Because she did not place
Maintenance’s carpentry work in high regard; she reportedly said the wooden ramps would not last a
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year. Thus, according to Adame, it was Pena’s intention to have them removed and replaced with
aluminum ramps.
(WXX-X)
The OIA confirmed the ramps Maintenance erected in October 2016, were attached to the very same
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portable buildings referenced in the Iron Lock construction cost proposal and related requisition request
package submitted to Procurement Services in January 2017.
(W6-2, paras. 2 through 4) (W6-3, Work order provided by Michael Smith) (W6-4, Photographs of finished
wooden ramps provided by Smith)
Introduction of Aries Building Systems
Formed in 2012, Aries is a West Virginia based company. According to Hoovers, the “family tree” includes
approximately two locations. They are in Houston and Troy, Texas. Per its website, the company has
sales offices in other Texas cities, including Fort Worth.
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Per the company website, Aries is a “commercial design, manufacture, transportation, construction, and
financing partner” that specializes in supplying full turnkey “man camps, remote work force housing, and
commercial modular buildings to a wide range of industries and applications across the U.S. and
Canada.” The site further says Aries offers “a multitude of education building solutions for school districts
– from temporary classrooms to permanent fully-functional schools…”
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Relationship between Aries and Iron Lock
Adame reported seeing Bryan Wilkerson of Aries and Siragusa together frequently. Pena introduced
Adame to Siragusa and Wilkerson. Based on their interaction with Pena, Adame said they gave the
impression that they had not just recently met.
Comparison of Aries/REDD Team Ramp System Price Quotes to McMillan Movers’
Relative to a specific allegation that she attempted to use a pass-through technique to use unapproved
vendors from Houston for aluminum ramps rather than the district awarded vendor (a provider of steel
ramps) Pena responded with the following:
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“I cannot speak to allegations for non-awarded contracts. I have had continuing discussions with the
procurement office regarding the quotes received from the one vendor that was selected to provide steel
ramps…Being a good steward of [taxpayer] funds, it was my opinion that the pricing for the steel ramps
[was] not acceptable. I had spoken with Procurement about the price differences that we received
between aluminum ramps (approx. $8,000 per ramp) versus steel ramps (approx. $16,000 per ramp) to
determine if there were any other options available.
In the end, we went ahead with reduced scope of work (to obtain steel ramps at a reduced number of
campuses to meet that budget) and sent email correspondence informing vendor of that decision. To my
knowledge, vendor has not responded to the inquiry.”
As detailed in Sub-Appendix B-3, quoted prices for the exact same 20 sites, all submitted in March 2017,
revealed the Aries prices were between 23 and 28 percent higher than McMillan Movers’. It should be
noted that the McMillan Movers prices were based on site visits; the Aries quotes were not.
In spite of being the awarded vendor, with lower prices that Aries quote, the district has not awarded any
of the above referenced ramp installation projects to the McMillans to date.
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Seagoville Groundskeeper’s House Project Awarded to Iron Lock Construction
More extensive details concerning this project are found in Sub-Appendix B, beginning on page 17. The
supporting evidence for all the information presented on this topic is referenced in the sub-appendix.
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The first contract the district awarded to Iron Lock Construction was for the leveling of a portable building,
the Seagoville groundskeeper’s residence. The contract was executed on December 7, 2017; however,
the district did not issue a purchase order until March 22, 2017. Aries did the actual leveling work as a
subcontractor under Iron Lock.
Email records reveal Siragusa submitted an initial quote of $9,963 for this project on September 26, 2017
—while he was still working as a project manager for Phillips-May and only 10 days after he formed Iron
Lock Construction Services, LLC. Procurement Services twice cancelled the requisition. On March 7,
2017, Pena wrote the following message to Siragusa: “…we talked to Tim AGAIN…We are resubmitting
the requisition. Third time is a charm. ☺ ”
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In the amount of $21,560, the contract was for all necessary repairs “to the pier and beam foundation of
the groundskeeper’s house” at the Seagoville Environmental Center. Iron Lock’s cost proposal shows a
$19,600 base bid for “foundation repairs to house.” The contract bearing Burrough’s signature, references
attached Exhibits A and B, which was said to set forth the scope of work and time for performance.
Neither the Capital Improvement Department nor Procurement Services produced either of the exhibits in
response to the OIA’s requests.
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Iron Lock’s contract states the following under Vendor’s Duties and Representations:
“The District is entering into this Agreement in reliance on Vendor’s special and unique abilities with
respect to performing the work, and vendor’s special and unique abilities with respect to construction
services.”
The “special and unique abilities” language belies the fact that awarded vendor McMillan Movers has
been leveling piers under portable buildings for the district for years. Their current contract lists a $650
hourly rate (minimum of 8 hours) for leveling piers--$5200 per day ($650 X 8). Per the contract, that
includes “all manpower & equipment needed per project.”
According to Karen McMillan, the district did not inform them of the Seagoville leveling project; therefore,
they did not submit a quote. Based on his recent site visit, Mr. McMillan said the Seagoville
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groundskeeper’s residence would likely have been a two-day job for McMillan Movers. Based on their
contractual daily rate, they would have charged $10,400 ($5,200 X 2) plus the cost of the skirting.
McMillan Movers charges $7.25 per linear foot to remove old skirting and $41 per linear foot to install new
metal skirting. Depending on whether the structure is a double or a single, the cost of removing the old
and installing new skirting would have been between $5,404 and $8,492, making McMillan’s total cost
between $15,804 and $18,892 ($2,668 to $5,756 less than what Iron Lock charged). Stated another way,
Iron Lock charged between 12.4 and 26.7 percent more than what the awarded vendor would have
invoiced.
The following is a snapshot of Iron Lock’s construction estimate, based on an anticipated 10-day project:
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Investigator’s Note:
The supervision charges plus overhead and the other five percent “fee rate” total $8,122 ($6,384 + $968
+ $869). That equates to over 41 percent of the total contract amount. According to Buyer Holt, Siragusa
is the “one and only badged associate for Iron Lock Construction.”
When asked why the district would be charged for the services of a “gen. superintendent” (80 hours) and
a project manager (40 hours) for the leveling of the Seagoville groundkeeper’s residence, Adame said
projects like that would not be considered remodeling or construction. Thus, district project managers
would generally be the only on-site supervision needed. Adame said those fees were destined for
Wilkerson and Siragusa. According to Adame, both Siragusa and Wilkerson were always “in the mix” on
projects.
Upon inspecting the groundskeeper’s residence recently, Neal McMillan observed the skirting needs to be
painted to protect it from the elements. He also reported that the resident of the building (Eric LNU) said
he was having trouble with the doors not fitting properly. According to Mrs. McMillan, if doors have been
“shaved”, due to foundation issues, they may not open and close properly after a foundation leveling.
Thus, it is the McMillan’s practice to check all doors and adjust them, as necessary, after the leveling is
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done.
Cobbs said he personally inspected the work, which involved confirming there were new support blocks
under the building, visually inspecting the previously identified cracks, and placing a level on various
spots on the floor to confirm levelness. He said he also spoke with the groundskeeper who was satisfied
with the results.
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Other Business Directed to Aries and Iron Lock
In addition to the Seagoville portable leveling, Cobbs said Siragusa/Iron Lock played a part in the Carr
and McShann “make-ready” modular building projects. Records show the contracts were with Aries;
however, information from multiple sources indicates Iron Lock received a portion of the contract amount
—apparently through subcontracts.
Investigator’s Note: At this point in time, the district had multiple awarded job order contractors. Iron
Lock, without on-staff construction workers, apparently operated like a JOC on district projects without
having to compete for that work.
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Cobbs said Iron Lock also got the districtwide paint project and the contract for the modular building
study. He admitted Siragusa’s knowledge of the district’s “ins and outs” and familiarity with key internal
personnel gave him a competitive advantage.
(W5-4, pg. 3, paras 3 & 4)
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Investigator’s Note: Siragusa’s direct dealings with Pena are documented throughout this report. The
district awarded Iron Lock’s most recent contract, however, after Pena separated.
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Fraudulent Conduct Discovered: MWBE Pass-Throughs
In association with job order contracts initiated by the Capital Improvement Department, the OIA
discovered a vendor, Phillips-May, entered into multiple subcontracting agreements with Ponce
Contractors, LLC and Picasso Contractors, LLC, both of which are owned by Elizabeth Ponce. Based on
the evidence obtained to date, Ponce/Picasso played no meaningful role in the projects. Ponce passed
the work on to sub-subcontractors. Thus, these would be classified as pass-throughs.
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Referral to Outside Agency
Outside agency name and reason for referral o.
Explanations and Defenses Offered

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Pena’s explanations and defenses are incorporated in the discussions of the various topics covered
throughout this report.
Relevant Policies and Procedures
According to Texas Education Code 44.031(a) all contracts, except contracts for the purchase of
produce or vehicle fuel, valued at $50,000 or more in the aggregate, for each 12-month period are to be
made by the method that provides the best value for the district. Among the nine options the law allows
school districts to use are competitive bidding, competitive sealed proposals, requests for proposals, and
job order contracts. The statute authorizes job order contracts for the “minor construction, repair,
rehabilitation, or alternation of a facility,” if the work is of a recurring nature but the delivery times are
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indefinite and indefinite quantities and orders are awarded substantially on the basis of pre-described and
pre-priced tasks.
Texas Education Code § 44.032
(a) In this section:

(1) "Component purchases" means purchases of component parts of an item that in normal
purchasing practices would be made in one purchase.
(2) "Separate purchases" means purchases, made separately, of items that in normal purchasing
(3) "Sequential purchases" means purchases of items over a period, that in normal purchasing
(b) An officer, employee, or agent of a school district commits an offense if the person with criminal
negligence makes or authorizes separate, sequential, or component purchases to avoid the requirements
of Section 44.031(a) or (b). An offense under this subsection is a Class B misdemeanor and is an offense
involving moral turpitude.
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Section 2269.403:
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Texas Penal Code, Title 8

Offenses against Public Administration
Chapter 37, Perjury and Other Falsification, Sec. 37.01
In this chapter, a "Governmental record" is defined as “anything belonging to, received by, or
kept by government for information.” A "statement" means “any representation of fact.”
Sec. 37.10, Tampering with Governmental Record

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(a) A person commits an offense if he:
(2) Makes, presents, or uses any record, document, or thing with knowledge of its falsity and
with intent that it be taken as a genuine governmental record…
(5) makes, presents, or uses a governmental record with knowledge of its falsity…
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(c)(1)…an offense under this section is a Class A misdemeanor unless the actor's intent is to
defraud or harm another, in which event the offense is a state jail felony.
(d) An offense under this section, if it is shown on the trial of the offense that the governmental
record is described by Section 37.01(2)(D), is:
(1) A Class B misdemeanor if the offense is committed under Subsection (a)(2)…and the
defendant is convicted of presenting or using the record;
(2) A felony of the third degree if the offense is committed under:

(A) Subsection (a)(1), (3), (4), or (6); or
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(B) Subsection (a)(2) or (5) and the defendant is convicted of making the record; and
(3) A felony of the second degree…notwithstanding Subdivisions (1) and (2), if the actor's intent
in committing the offense was to defraud or harm another…
(g,) A person is presumed to intend to defraud or harm another if the person acts with respect
to two or more of the same type of governmental records…
Per CV (LOCAL):
…The contingency allowance is to be used only for expenditures that do not require a change order.
The contingency allowance may be used to pay for changes in the work, including but not limited to those
resulting from hidden or unforeseen conditions. The contingency allowance may be used to pay claims.
Use of the contingency allowance must be authorized in advance by the Superintendent of Schools or
designee.
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…Change orders shall be used to document any change in contract time or contract sum, or any
material change in scope of work.
For construction contracts valued at $50,000 or more, the following approval process shall apply. If a
change order is the result of a hidden or unforeseen condition, force majeure, code interpretation or for a
savings in cost, the Superintendent of Schools or designee is authorized to execute the change order,
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transfer the necessary funds, and submit the changes to the Board for ratification. Any other change order
must be approved by the Board prior to any work covered by the proposed change order or change in the
approved plans.
Unless waived by the Board, if the change order(s) would increase the value of the contract by more than
25 percent, the change order shall be submitted to separate competitive procurement.
DH (LOCAL):
Employees entering into unauthorized procurement transactions may be personally liable and subject to
disciplinary action.20
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Employees whose actions result in a ratification of funds to be taken to the Board for review and possible
action may be subject to the following disciplinary actions depending upon severity: 1) Additional training;
2) Letter of concern; 3) Reprimand; 4) Restitution; and/or 5) Termination.
Exceptions may be made to this regulation by the Superintendent of Schools or designee.

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DH (REGULATION)21 (Board Policy Update Detail Page)
CH (LOCAL) (Issued 10/3/2016):
ETHICAL STANDARDS
“During the course of pursuing contracts, and the course of contract performance, contractors and
consultants and their subcontractors, sub-consultants, and vendors shall maintain business ethics
20This policy has been in place since at least November 25, 2015. (Board Document, dated April 28, 2016, amending
DH (LOCAL))
21 This regulation was last updated September 14, 2017. (Board Policy Update Detail Page)
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standards aimed at avoiding real or apparent impropriety or conflicts of interest. Violation of these
standards may result in the cancellation of existing purchase orders or contracts or exclusion from current
or future procurements.
All vendors and employees must follow conflicts of interest avoidance and other ethical standards as set
out in DBD (LOCAL) and should be aware of questionnaires and documents as required by Texas Local
Government Code Chapter 176, as well as applicable federal regulations with any proposal or other
writing related to a potential agreement with the District in compliance with CHE (LEGAL). All related
ethics documents shall be publicly posted on the District's procurement website.
Purchasing Manuals (2015 and 2016)

The end-user “shall” use awarded suppliers to procure goods and services. Per the Glossary of Terms:
“An ‘awarded supplier’ is a supplier that has been awarded a bid/proposal through the Dallas ISD
competitive procurement process or through a cooperative purchasing program with an inter-local
agreement.”
DF (LOCAL)
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The following acts or actions are determined to be good cause for termination of an employment
contract:
• Failure or refusal to comply with policies, orders, and directives of the Board,
Superintendent of Schools, and/or designees.
•
•
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Neglect of duty that constitutes peril of any degree to students.
Immorality, public lewdness, or other acts of moral turpitude, including unlawful practices.
• Stealing or misappropriation of property of the District…
• Making, presenting, or using any record or document with knowledge of its being false and
with the intent that it be taken as a genuine governmental record.
• Bullying, physical or verbal abuse of students, parents, coworkers, or other persons.
Conduct or behavior not otherwise expressly referred to in this policy, either during or off
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•
working hours, that could cause the public, students, or employees to lose confidence in
the administration and integrity of the District.
• Failure to meet acceptable standards of conduct for employees in like or similar positions,
which would make retention of the employee detrimental to the best interests of the
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District.
• Violation of any federal statute or state law, or the United States or State of Texas
Constitution.
• Failure or refusal to fulfill duties or responsibilities as set forth under the terms and
conditions of the employment contract, or contained in the employee’s job description or
local Board policy.
DBD (LOCAL):
Financial Integrity
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“The use of District funds or assets for any unethical purpose is prohibited….No false entries shall be
made on the books or records of the District for any reason. No documents shall be altered nor shall
those lacking proper authority sign them. No payment on behalf of the District shall be made or approved
with the understanding that it will be used, or might be used, for something other than the stated purpose.
The District’s financial books, records, and statements shall properly document all assets and liabilities,
shall accurately reflect all transactions of the District, and shall be retained in accordance with the
District’s record retention policies and all applicable laws and regulations. [See CPC (LEGAL); BBFA
series; BBFB (LEGAL); and DBD (LEGAL)]”
MWBE Guidelines
“All district bidders/proposers are required to demonstrate positive and reasonable good faith efforts to
subcontract with and/or procure supplies/services with M/WBEs.”
10. “…The contractor must provide access to books, records, and accounts to authorized district, state,
and federal officials for the purpose of verifying M/WBE participation and good faith efforts…
Conclusions
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The investigation revealed Pena attempted to use JOCs with Phillips-May in order to use the services of a
particular, non-awarded vendor. She later used a non-awarded vendor in a JOC type capacity, even
though the project management company was not an awarded JOC firm. Further, with knowledge that
internal craftsmen completed certain wheelchair ramp projects, Pena signed requisition requests for
vendor installations of the same ramps. In those instances, Pena either intended to have brand new
ramps removed and replaced, or sought the issuance of purchase orders for work that she did not expect
to be performed.
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The evidence substantiated Manning’s procurement related allegations. Pena, who annually managed
$15 million in deferred maintenance funds, repeatedly violated Purchasing Manual directives, policy, and
law.
Costs associated with many CIP projects exceeded $500,000. Witness testimony and district records,
however, showed Pena deliberately structured procurements to prevent any purchase order from
exceeding $500,000. When subsequently faced with cost overruns on some projects, Pena directed the
continuation of vendor services without authorized purchase orders. To pay vendors for services rendered
without purchase orders, Pena employed various methods designed to separate the payments from the
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projects to which they related. According to witness accounts, the unauthorized transactions documented
in this report were not out of the ordinary for Pena. Thus, the following statements Pena provided for CFO
Terry’s use in preparing the response to TEA were untrue.
There were instances when Procurement Services personnel accommodated Pena’s questionable
methods. Relative to transactions in the latter part of 2016 forward, however, Pena received clear and
appropriate direction from Procurement Services. For example, in October 2016, Procurement Services
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Buyer Robbie Daniels sent Pena a message that opened with, “The attached request has been rejected
because this is considered sequential purchasing.” Following other similarly themed messages, the
Procurement Services Director of Operations wrote the following in an April 6, 2017, message to Pena:
“…you cannot break purchases apart just to get stuff done faster.” Pena’s actions, subsequent to her
receipt of these messages, demonstrated her intent to circumvent established policies and procedures.
They also revealed the untruthfulness of the statements she submitted in response to the TEA inquiry.
Finally, the investigation revealed a JOC (Phillips-May) repeatedly used a particular certified women
owned business enterprise (MWBE) as a subcontractor. Providing no commercially useful function, the
subcontractor passed the whole of the work on each project to a sub-subcontractor, keeping a portion of
the contract amount (typically, approximately $3,500) for serving as the “MWBE pass-through”. This and
other vendor practices and relationships merit further scrutiny.
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_______________________
Andrea Whelan Inspector
Dallas Independent School District
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LIST OF WITNESSES AND EXHIBITS
Witnes Witness Name Exhibit Description

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1 Complaint, (Case No.15087)
1A Attachment A, Record of the OIA’s
communications with the TEA
1B Attachment B, Memo of Interview with Zachary

Manning
2 Complaint with associated supporting material
regarding Aries Building Systems (Case No.
15547)
3 Complaint with associated supporting material
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(Case No. 15549)
4 Complaint (Case No. 15563) with associated
supporting material
5 Complaint(Case No. 15564) with supporting
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material
Complaint (Case No. 15728) with supporting
material
Zachariah Manning’s report to the Texas

7 Education Agency, dated August 4, 2016
Texas Education Agency response to the Dallas
8 ISD, dated December 6, 2016
9 Pena’s Oracle record
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Schedule of Package 3 Hail Damage Roof
10 Projects provided by Pena
Andrea Whelan, CFE Budget Amendments Board Doc. for May 28,
Manager, Investigative Services 11 2015
W1 Office of Internal Audit
9400 North Central Expressway Budget Amendments Board Doc. for September
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12
Dallas, Texas 24, 2015
Oracle records associated with PBK Architects

13 purchase order No. 594003
Oracle records associated with Alliance Architects
14 purchase order No. 594002
Purchase Analysis by Board Document Report
15 showing status of architectural purchase orders
Summary of Package 3 & 4 Project Costs, with
16 supporting documentation
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LIST OF WITNESSES AND EXHIBITS
Witnes Witness Name Exhibit Description

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Summary of Elapsed Time on CIP Roofing
17 Projects
PBK scope of work for carbon monoxide
18 installation project
Oracle records with AOW for Sanger $264,559

19 project
Oracle records with AOW for Sanger $187,433
20 project
Oracle records associated with unauthorized
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21 $113,867 payment on Sanger project
22 Timeline associated with Webster ramp project
23 Public records regarding Iron Lock
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25
Public Records regarding Aries Building Systems
Aries Building Systems website information

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Witnes Witness Name Exhibit

Description
s
W2 Mary Smith, CFI, CFS, DIA,
FLMI, ASC
1 Process Report
Senior Investigator
Scott Layne 1A Employee Statement, dated September 20, 2017
W3 Deputy Superintendent 1B Attachment 1 to Statement
Operation Services 1C Attachment 2 to Statement
Sylvia Pena, former director 1
Employee Statement, dated September 8, 2017
Capital Improvement
W4 Department
3700 South Lamar Memorandum of Interview, dated September 7,
2
Dallas, Texas 75215 2017
1 Employee Statement, dated September 21, 2017
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Memorandum of Interview, dated October 18,
2
Jermauld Cobbs, Project 2017
Manager
Email communication dated November 7, 2017
Capital Improvement 3
W5 with attached photographs
Department
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3700 South Lamar
Dallas, Texas 85215 4
Memorandum of Conversation, dated November
27, 2017
Requisition package Macon aluminum ramp
5 project
Memorandum of Conversation, dated October 2,
1 2017
2 2017
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Email communication with work order number
3 583839 provided by Michael Smith
Michael Smith, Manager
W6 NE Maintenance Department 4 Email chain regarding Civil Rights complaint
4A Resolution Agreement
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4B Work orders
4C Work order number 652081
4D Resolution Agreement response photos

W7 Todd Walker 1 2017
1 Memorandum of Interview dated August 8, 2017
Memorandum of Interview dated November 8,
2 2017
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Email communication with attachments 1 through

3 5, dated November 8, 2017
James Sutherland, Operations
W8 Mgr. 3A Correspondence dated April 15, 2015
Skye building Services
3B Correspondence dated July 25, 2015
3C Correspondence dated August 13, 2015
3D Assignment of Work, dated August 18, 2015
3E Correspondence dated September 23, 2015

W9 Corrine Berti-Craig
W10 Lester Baldwin, 1 Employee Statement, dated
Christopher Gray, Executive
Director
Maintenance and Facility
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W11 1 Employee Statement, dated September 20, 2017
Services
3700 South Lamar
Dallas, Texas 75215
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Witnes Witness Name Exhibit

Description
s
Employee Statement dated October 17, 2017,
1 with attachments
Request for Proposals package for portable/
2
Robbie Daniels, Senior Buyer modular building relocations and related services
Procurement Services Master Services Agreement with Solar Systems,
W12 Department 3 Inc., dated August 28, 2015
9400 North Central Expressway
Dallas, Texas Requisition request package, Sanger portable,
4 $51,144.75
Requisition request package, Sanger portable,

5 $16,181.50
Jessica Snow, Operations
T
W13 Manager 1 Memorandum of Interview, dated
LMC Fire & Security
Memorandum of Interview, dated November 7,
W14 Robert Adame 1 2017
Memorandum of Interview with Neil and Karen
AF 1
1A
McMillan on November 8, 2017
Summary document entitled Work Performed

for DISD Maintenance & Facilities Dept.
Summary document entitled DISD Ramp
1B
Request List with attached Proposal Forms
Email communications between Mrs.
McMillan and the district regarding the
1C inclusion of prices for aluminum wheelchair
R
ramps
Summary document showing ramp projects
for which McMillan received assignments of
1D work, but no purchase orders (quotes
Karen McMillan, President attached)
W15 Solar Systems, Inc.
D
d/b/a McMillan Movers Email communications and other documents

comparing McMillan’s pricing to quotes
1E
observed on the white board in Robert
Adame’s office
Email communications and related
documents with the following explanatory
1F narrative: “Alternate route Sylvia took after
conflict over McMillan Movers’ bidding
aluminum ramps”
HIGHLY CONFIDENTIAL
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39 !
Estimate and related email communications

1G regarding Seagoville High School wheelchair
ramp projects
Spreadsheet entitled, Estimates Submitted to
1H
DISD since 01/01/2015
2 Memorandum of Conversation
Email and attached quote for Titche Elementary
3 project
Gabriel Guerra, Assistant Memorandum of Conversation, dated October 31,
W16 Principal 1 2017, with attached photos of Seagoville ramps
Seagoville High School

Michael Overacker, Supervisor 1
W17 15, 2017
NE Maintenance Department
T
2 Email with attached work orders
1 13, 2017
Timothy Holt, buyer 2 Iron Lock vendor file

W18
AF
Procurement Services 3
4
Holt email message regarding Iron Lock contract
Requisition request package for Seagoville
portable leveling project
1 Email message, dated November 10, 2017

W19 Coy Frazier,
2 Excel spreadsheet of work order records
R
D
HIGHLY CONFIDENTIAL
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40 !

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MIKE SINGLETON, CPA

Chief Internal Auditor

To: Mike Singleton, CPA, Chief Internal Auditor

From: Aaron Munoz, CPA, CFE

Date Submitted to Management: Click here to enter a date.

Case Number: 15728 Case Number

Type of Investigation: Administrative

Type of Report: Draft

To: Michael Hinojosa, Superintendent of Schools

Executive Summary .........................................................................................................................4

Texas Education Code § 44.032

(a) In this section:

Board of Trustees’ Request for an Expanded Review of Procurement Practices

Seeking Procurement Services approval of “component W1-2, Complaint with

Pena & • Favorable treatment of selected vendors

Complaint from Former Capital Improvement Department Manager Zachariah Manning6

Testimony of Chief Operating Officer/Deputy Superintendent of Operations Scott Layne

Extent and Results of Investigation

False Information Submitted as Part of the District Response to TEA Inquiry

Texas Penal Code, Title 8

Sec. 37.10, Tampering with Governmental Record

(a) A person commits an offense if he:

(2) a felony of the third degree if the offense is committed under:

offense was to defraud or harm another…

Analysis of Pena’s Statements

(W8-1, Memorandum of Interview, dated August 8, 2017, pg. 3, para. 2)

(W-9, Corinne Berti-Craig

The OIA’s Interview with Pena

(W4-1, pg. 4, paras. 2 through 5)

Procurement Services Directive to Seek Board Approval

Limit on Purchase Orders and/or Job Order Contract Amounts

(W4-2, Memorandum of Interview, dated September 7, 2017, pg. 3, para. 4)

“Package 4” Roofing Projects

(Sub-Appendix B-1, pgs. 2 & 3)

Kramer $ 472,064.34 $ 53,000.00 $ 525,064.34 $ 488,724.14 $111,073.67 $

Frazier $ 370,263.34 $ 41,000.00 $ 411,263.34 $ 484,367.26 $110,083.47 $

Lipscomb $ 130,920.79 $ 14,000.00 $ 144,920.79 $ 485,506.38 $110,342.36 $

Hillcrest $1,939,576.72 $215,000.00 $2,154,577.72 $ 484,000.00 $110,000.00 $

Mata $ 222,765.61 $ 25,000.00 $ 247,765.61

Wheatley $ 6,801.87 $ 1,000.00 $ 7,801.87

Dunbar $ 479,482.19 $108,973.23 $

Rogers $ 343,373.73 $ 78,039.48 $

Total $3,994,248.27 $485,500.00 $3,648,836.07 *$829,480.9 $ 4,478,116.98

11 Dunbar, Mata, Kramer, and Hillcrest

(Sub-Appendix B-1, pg. 3)

(W6-1, Memorandum of Conversation, pgs. 1 through pg. 3, para. 2)

(W1-13, pgs. 14 & 15) (W1-14, pg. 10)

Cost Per Square Foot Comparison

12 Rogers, Lipscomb, Preston Hollow, and Wilson

(W6-1, pg. 3, para. 5)

(W1-16, Summary of Package 3 & 4 Project Costs with supporting documentation)

(Sub-Appendix B-1, pg. )

(W6-1, pg. 3, para. 3)

Date Sender Recipient Excerpt from Message (un-corrected)

“Work has already been 95% completed for all Skyes’

By ceasing work this would include cutting off all starlink

“Please confirm decision on below as SKYE is expecting to

“This PO was issued for programming only. If we were to use

“I understand…however, if LMC does not want to use this

Portable Relocation and Wheelchair Ramp Installation Projects

Unauthorized Procurement No. 1

August 18, 2015

“Assignment of Work was issued.”