UPDATE: The Seattle Schools board voted to fire Superintendent Goodloe-Johnson  without cause, Wednesday evening.
Seattle Public Schools board appears poised to fire Superintendent Maria Goodloe-Johnson Wednesday evening after an auditors' report said mismanagement of funds has cost the school district $1.8 million. The Washington state audit looked at practices in the district's small business contracting program, part of a $1.2 billion effort to improve school buildings called The Building Excellence Program.The board released a statement saying it will consider a motion at its regular meeting Wednesday night, to terminate Goodloe-Johnson's contract without cause, buying out her contract and paying her $264,000 in severance pay, the amount of her annual salary. The motion would appoint the chief academic officer, Susan Enfield, as interim superintendent.
"The mission of Seattle Public Schools is to deliver on the promise of a quality education for every student in Seattle," said school board President Steve Sundquist in a statement. "Public trust and confidence is fundamental to that mission. The revelations of financial irregularities and a lack of management oversight demonstrate a clear breach of that vital trust.
"Like all other parents and taxpayers in Seattle, we Board Members are angry and enormously disappointed."
Neither Goodloe-Johnson nor her deputy, Chief Financial and Operations Officer Don Kennedy, are accused of wrongdoing, but rather of failing to ensure proper oversight of the BEX program. Hired in 2007, Goodloe-Johnson reportedly was warned of problems with the program in a 2009 report by the Sutor group. That report warned that the district's program needed more oversight.

Audit Criticizes Management Practices But School District Disputes Conclusions
The BEX program was responsible for renovation and construction projects at  Roosevelt, Cleveland, Garfield, South Lake and Nathan Hale high schools; at Hamilton International Middle School and at .
The state audit found, "…the District did not always comply with its established policies and procedures or provide effective management and oversight. For example, for the seven school construction projects and 15 contracts we reviewed, the District did not always follow vendor selection rules; its employees bypassed some required approvals; and change orders were not always adequately justified and supported. In addition, we found overcharges, inadequate controls over project scope, and disorganized and incomplete record-keeping."
Included in the $1.8 million identified in the audit as wasted funds were:

• $454,000 paid to a general contractor/construction manager (GCCM) in compensation for schedule delays
• $93,900 in overcharges due to factors such as parking and mileage costs not agreed in the contract; a math error; double billing for a hauling payment; labor rates higher than agreed; bedrock removal that "should have been included as part of the final settlement agreement."
• $353,100 in "unsupported costs" including: additional rock excavation costs; charges for removing excavated material; incentive fees and extra labor costs.
• $334,000 in fees to an architect, without documentation of a change to the scope of the work.

 
A detailed statement by the school district (an appendix to the audit report) refuted many of the audit office's conclusions point by point. For example, the audit suggested that the interior design costs could have been substantially lowered by taking more bids when the contract was expanded. However, the district said the contract already had been advertised twice after the first ad drew only one bid. Two bidders responded to the second ad, but the first bid was the lowest.
"No other firms provide these services in the Seattle area," the statement says. "…it is unlikely that competition for the added work would have had any meaningful impact on price."
Other charges the school district admits as mistakes: paying for the same service twice, for example, and the math error. The response also points out that changes were made in line with many of the recommendations in 2009 and 2010. 

A criminal investigation, precipitated by the auditors findings is investigating the BEX program, and in particular its dealings with a small business support system. According to the state audit office investigation, the district paid $280,000 in services it did not receive or which benefited a private nonprofit. And it says $1.5 million was spent for questionable benefit. Those involved. But at least two contract recipients say the services were provided and many small businesses benefited. 
 
The Seattle Urban League Comes Under Attack
Implicated in the mismanagement are the BEX program manager, leading African American community activists and the Seattle Urban League, which provided $595 of the contract services at issue. They strenuously refute all charges of wrongdoing. Story here
The auditors' investigation into mismanagement of funds accused the Urban League of failing to properly bill and account for school district funds, which they used to run its Contractor Development & Competitiveness Center. The CDCC was set up in 2002 to help minority businesses – historically locked out of government projects - bid for a share of government work.
In a press conference Wednesday the Urban League said it had done everything required by the district liaison Silas Potter, who ran the BEX program.
"We absolutely did nothing wrong," said Tony Benjamin, manager of the Urban League's Contracting Development and Competitiveness Center. "The auditor said we did nothing wrong.  We just believe more clarification is needed on the items in question."
Potter told the Seattle Times that his supervisors approved his working methods.
"I've been thrown under the bus," he told the Seattle paper. "It's a lot bigger than Silas Potter. They're trying to minimize their exposure of what they've done and maximize what Silas has done." 
More About Seattle Schools, Maria Goodloe-Johnson and the Urban League program: Leaders say program was misrepresented.