HOUSTON, Texas – Texas’ largest school district, Houston ISD, is under fire after state-appointed Superintendent Mike Miles admitted the district violated its procurement policy by spending hundreds of millions of dollars without the school board’s approval.
On Jan. 13, Miles held a news conference to address what he labeled a “good-faith error in the district’s purchasing review process that was discovered in December.” According to Miles, the team responsible for reviewing district projects made purchases without board approval, believing approval was unnecessary for purchases affiliated with what he called “purchasing cooperatives.”
Miles said the results were not submitted to the board, but no laws were broken. An internal auditor determined that the purchases were in line with board-approved budgeting amounts.
“I believe this was a good-faith error, but nevertheless it was an error, and it must be rectified,” Miles said.
KPRC 2 obtained a copy of the two-page audit, which showed that 10 purchases were made in violation of the procurement policy from Aug. 1, 2023, to Nov. 30, 2024. According to the public memorandum, the final audit, completed on Jan. 10, confirmed that all reviewed purchases adhered to standard approval processes were charged to reasonable budget line items, and were accurately recorded.
On Monday, starting at 6 a.m. -- KPRC 2 Investigates Mario Diaz will delve deeper into HISD’s spending, focusing on the rollout of its massive $4 billion bond propoal to voters in November.
What is HISD’s procurement policy?
The HISD procurement process is the process of acquiring the goods and services that HISD needs to operate. This process includes identifying needs, researching suppliers, and paying for the goods and services.
KPRC 2 Investigates spoke with former HISD board member and LULAC President Sergio Lira who called the situation “quite alarming” and explained the district’s procurement process in the simplest form and how this impacts taxpayers.
Lira gave the following example of how the procurement process works: If every five years, the district is required to adopt new educational materials, such as textbooks for math and science. This process would begin with the district sending out a request for proposals (RFP) to book publishers. These publishers would then submit their proposals, which are reviewed by a committee that would select the best option based on quality and cost-effectiveness.
“The district sends out a request for proposals to the book publishers,” Lira said. “The different companies send in their RFPs, and a procuring committee picks the best in order at the lowest price to ensure that the lowest bidder gets the contract.”
Once a proposal is selected, it goes through a legal review to ensure compliance and the absence of conflicts of interest. The board of trustees or managers then reviews and approves the proposal during their monthly meetings. Lira said this is how the procurement process is done, ensuring transparency with the public.
In the recent event where the district said they made a “good-faith error,” Lira said it wasn’t just a mishap, but a failure in the procurement process.
“They were just approving a lot of expenditures that were running really fast with a new administration,” Lira explained. “The board of managers should have caught it when you’re spending over $850 million. They created the policy and they should have caught it.
Lira called the Board of Managers “inexperienced with educational jargon.”
“These folks pretty much approved and passed whatever they said to them because they’re receiving a great fire hydrant of information, and if they don’t understand educational documents, language and jargon, they’re going to go, ‘Okay, that’s good.’ They’re not really taking a deep dive into what’s happening.
Lira stressed that this was a huge failure in the district’s legal department.
“It’s our taxpayer dollars that’s being spent, so we need to know exactly where every dollar goes,” Lira stated.
Lira said they have simpler and more transparent processes in smaller school districts, which could serve as a model for larger districts like Houston ISD.
So how can the district restore the public’s trust? Lira is advocating for independent audits and greater transparency in financial dealings.
“Before you even ask for a tax increase, clean up the corruption and waste,” he advised, mentioning KPRC 2′s DRAINED investigation and how Amy Davis exposed the city of Houston’s water department and helped eliminate corruption.
“It’s our taxpayer dollars that pay for everything that HISD spends... whether it’s state or local taxes,” Lira said. “Before you even ask for a tax increase... you’re asking for a bond, roughly $4 billion, without first cleaning up the corruption and waste and publicizing it, just like the mayor of Houston is doing. I think HISD should follow Mayor Whitmire’s model of cleaning up waste before they ask the public for any bond referendum to pass.”
KPRC 2 reached out to HISD regarding preventing procurement violations in the future and the district sent in the following response:
The administration and the Board of Managers have consulted and are taking the following steps moving forward:
- Ensuring HISD has additional legal services to support the internalization of board changes.
- Facilitating departmental understanding of board policy changes by increasing access to representatives from legal services.
- Proceeding with an audit of procurement procedures, which was already planned by Miles’ administration.
