Audit by state puts TPS loss at $660,000; ex-official accused of theft

1/8/2010

A former Toledo Public Schools administrator is accused of stealing $660,000 from the district, which could have gone unnoticed if he hadn't been arrested allegedly trying to continue the activity in Cleveland.

Daniel Burns, who was employed by TPS for 30 years, stole the public taxpayer dollars mostly through fraudulent equipment purchases and consultations, according to a special state audit released yesterday.

The alleged theft is three times as much as Mr. Burns is accused of taking from the Cleveland Metropolitan School District during his employment there.

"It's money that was taken away from what should have been used for education," TPS Superintendent John Foley said. "Every time we take resources and divert them from what we should be doing, it's a problem and it's significant."

The special audit looked at Mr. Burns and TPS from July 1, 2001, to Dec. 31, 2008.

Mr. Burns was an assistant to the business manager from July, 2001, until he was named acting business manager in January, 2002. He was then promoted to chief business manager of the district in July, 2003.

Mr. Burns served in that role until June, 2006, when he retired and followed former TPS Superintendent Eugene Sanders to the Cleveland district where Mr. Burns was chief operating officer.

It was an employee in Cleveland who noticed something unusual with Mr. Burns' activities, prompting an investigation into his time there and at Toledo Public Schools.

Mr. Burns' activities went unnoticed in Toledo for so long because the district lacked checks and balances and Mr. Burns was able to order equipment, pay for it, and claim he received it without anyone else getting involved, Ohio Auditor Mary Taylor said.

"He was responsible for every step of that process, which was what allowed him to perpetuate this type of theft for such a long period of time," Ms. Taylor said. "There wasn't that other person looking over his shoulder, so to speak, to make sure that this type of theft couldn't be committed."

That theft included fake purchases of 20 pieces of equipment for $584,695 through the Toledo company Superior Offset Supplies - 18 copiers, a stapler binder, and a printer/folder/stuffer/finisher.

Mr. Burns also approved $44,466 for consulting payments to the company, headed by John Briggle, 56, and there was no documentation that the consultations occurred.

Also, Mr. Burns paid Superior Offset Supplies $29,267 twice for the same equipment repair.

The auditor issued findings for recovery against both Mr. Burns and Mr. Briggle for those $658,428 in illegitimate purchases.

Both Mr. Burns and Mr. Briggle have been charged criminally for alleged thefts from the Cleveland district, which the auditor detailed last month as more than $181,000.

Mr. Burns pleaded not guilty Dec. 17 in Cuyahoga County Common Pleas Court to one count each of racketeering and theft in office and six counts of tampering with records.

Mr. Briggle pleaded not guilty the same day to racketeering, theft, and six counts of tampering with records.

Both are scheduled to appear next in Cuyahoga County court on Feb. 1.

No charges have been filed against the men in the local case. "Our investigation continues," said John Weglian, chief of the Lucas County Prosecutor's Office special units division.

Mr. Weglian said he was aware of the state audit but couldn't discuss the ongoing criminal investigation.

The bogus equipment purchases in Toledo were similar to the theft Mr. Burns is accused of in Cleveland.

A new twist is the $1,571 of public taxpayer money Mr. Burns paid to have background checks and investigations conducted on five individuals who were not employees of the district and who were not seeking employment through TPS, according to the special audit.

TPS has worked with Corporate Intelligence Consultants of Perrysburg to conduct legitimate investigations into alleged fraud and theft in office in the past, Superintendent Foley said.

The issue in this case was Mr. Burns ordering the company to conduct investigations into nonemployees, Mr. Foley said.

The fault lies with Mr. Burns and not the company, Ms. Taylor said.

"[Mr. Burns] ordered those particular investigations to be done and we really couldn't go so far as to cite the consultant in this case because he was acting under the direction of Burns," she said.

The auditor would not release the names of the individuals Mr. Burns investigated, but she did say all were notified.

"The audit report does not disclose the names of individuals, private citizens, whose privacy had already been violated by an individual who was certainly taking advantage of his position," Ms. Taylor said.

The total loss of public dollars from TPS is $659,999.

Ms. Taylor said it's the largest case of alleged fraud committed by a public school employee since she took office in 2007.

TPS should be able to recover the money stolen.

Mr. Foley said the district has begun discussions with its bonding company to recoup the losses and said the auditor's and prosecutor's offices have expressed interest in helping the district.

If convicted, Mr. Burns will need to repay the money either to the districts or their bonding agents, and it could come from his state pension, Ms. Taylor said.

She said she had no information on the suspect's assets and ability to repay the money.

The case has served as a wake-up call to TPS to clean up its business practices.

No longer can one person make a purchase start to finish, and there are separate individuals involved with ordering and paying for goods and services, TPS Treasurer Dan Romano said.

The changes started back in 2006 after Mr. Sanders left and took a number of administrators with him, Mr. Romano said.

TPS also has a new whistle-blower policy to encourage employees to come forward if they suspect wrongdoing.

The district also recently established an external audit committee to serve as another pair of eyes over its practices and to recommend better ways of doing business, Mr. Romano said.

Toledo Board of Education President Bob Vasquez said it's a shame the public trust was broken, but he's pleased with the administration's efforts to make sure it doesn't happen again.

"I think this individual broke a public trust, and I think that does a lot of damage between the public and government entities," he said.

"We want an environment of ethics and a culture of honesty and transparency."

Contact Meghan

Gilbert-Cunningham at:

mcunningham@theblade.com

or 419-724-6134.