Texas Education Agency Internal Audit Divisiog Investigation Memorandum To: Mike Morath, Commissioner of Education From: Bill Wilson, Director oflnternal Audit Date: November 17, 2017 cc: Penny Schwinn, Deputy Commissioner of Academics Kara Belew, Deputy Commissioner of Finance Justin Porter, Executive Director of Special P0pulations Subject: Investigation of Accusations made by Laurie Kash, Director of Special Education, Regarding Improper Awarding of a Sole Source Contract This memorandum documents the investigation of accusations made by Laurie Kash, State Director of Special Education, that Penny Schwinn, Deputy Commissioner of Academics, imprOperly awarded a sole source contract in May 2017 to AvenirEducation Inc. DBA (Referred to as The accusations made were that (1) Ms. Schwinn awarded the contract to a friend as a sole source; (2) arranged for another friend to be a sub-contractor on the contract; and (3) no attempts were made to determine if other vendors could provide the same services to justify that the contract he issued as sole source. The contract consists of a standard contract (contract no. 3723) issued May 1, 2017 and ending September 30, 2017 for $2,100,000. The contract was renewed for the period October 1, 2017 through August 31, 2018 for an additional $2,320,418. The purpose of the contract is to provide the Agency immediate capacity to advance its special education priorities by data mining of students? mandated individualized education plans with analytics that reveal trends, insights, and correlations that are unique. The contractor will leverage these insights using a system-level design thinking approach to identify ways to improve the IEP process and pilot solutions based upon the analytics, trends, and insights. Bac round Dr. Kash call me on October 9, 2017 saying she was going into a meeting with Ms. Schwinn and thought she was in trouble for criticizing the decision for sole sourcing a contract. She then outlined the above accusations to me. Dr. Kash was emotional in the discussion and said that maybe things could get worked out in the meeting and everything would be okay. I asked her to get back to me after the meeting, but she did not contact me again until November 6th. She called and said that she was thrown ?under the bus? by Ms. Schwinn and might lose her job. She also said that she reported her concerns about the sole source contract to the SAC, the AG Of?ce, and OIG. Dr. Kash said that SAO told her to contact 010 since federal funds were involved. She also said that she had retained an attorney to defend her under the Whistle Blowers Act, but did not mention that she had received a Letter of Reprimand on November 3rd. A Letter of Reprimand was issued to Dr. Kash on November 3, 2017 by her immediate supervisor, Justin Porter, Executive Director of Special Populations. The reprimand was for inappropriate conduct in accusing Ms. Schwinn of improperly awarding the contract; publicly criticizing decision to engage in an analysis of program to both internal and external stakeholders; and inappropriate disclosure to an out-of-state conference audience of information obtained from a Louisiana data analysis report that was shared with TEA in con?dence. On November 6, 2017, met with Ms. Schwinn and Mr. Porter to discuss the accusations made by Dr. Kash. Mr. Porter had sent me an e-mail earlier on November 6th, asking if Dr. Kash had reported concerns to me about the contract procurement. A?er this meeting, Ms. Schwinn requested in an e-mail on November 7th that lntemal Audit perform an investigation on the accusations made concerning the program?s actions related to issuing the contract. In summary, Internal Audit?s investigation showed that the accusations could not be substantiated, and the complainant?s charges were made without basis and were not supportable. Details concerning each of the accusations in the order made follows: Mr. Schwinn arranged the issuance attire comma! to a friend. Richard Nyankori is CEO of that is based in Jonesboro, GA. Ms. Schwinn was introduced to Mr. Nyankori by Christina Heitz, CEO of Cambiar Education. Ms. Schwinn knew Ms. Heitz by participating in a coaching education program conducted through the Broad Center. Ms. Heitz was managing Director of Broad at that time. Ms. Schwinn in networking her professional contacts in the Fall of 2016 looking for special education strategies and best practices, she was put in contact with an of?cial in a similar role in Louisiana who was doing a special education project with Ms. Heitz was one of the contacts that suggested she contact Louisiana to discuss the work being done there. After hearing about from Louisiana personnel, Ms. Schwinn asked Ms. Heitz if she could introduce her to Richard Nyankori at This was done on January 9, 20l7 in an e-mail to Ms. Schwinn and Mr. Nyankori that read: ?Penny. I ?m thrilled to be able to connect you with Richard Nyankori to talk about Special Education in Texas. He is the country ?s expert on the topic: lie was able to transform DCPS and achieve dramatic increases in positive outcome for special education students, and has a personal passion and vision that is truly inspiring. Look forward to talking more this week, but wanted to connect you together via email so you can hop on the phone directly. It is clear from this e-mail and others that this was the ?rst contact that Ms. Schwinn had with Mr. Nyankori and that they were not personal friends beforehand. Mr. Nyankori also con?rmed in an interview with lntemal Audit that that he did not know Ms. Schwinn prior to the introduction through Ms. Heitz. Accnsation: TEA ggratmeg??tr Ms. Heitz to in: hired as a salt-contractor an tire contract. Mr. Nyankori confirmed in an interview with lntemal Audit on November 15?? that he knew of Ms. Heitz through professional organizations they both belong to such as The Aspen Institute and Linkedln and their paths have crossed through professional coaching and networking, Mr. Nyankori indicated he hired Ms. Heitz because of her esperience in the education ?eld and expertise in special education, strategic planning and coaching. According to Mr. Nyankori, she will be responsible for two deliverables in the contract: (1) conduct training on innovative solutions with TEA staff and other critical leaders throughout the state and (2) interview key stakeholders in special education to inform change efforts. Mr. Nyankori did not suggest that TEA persuaded him to hire this subcontractor, and it was a decision he made early in the processing of the contract. internal Audit found no documentation in the ?les that might indicate any suggestions or preferences were made about sub-contracting. In fact, the Agency is not permitted to direct a vendor on what sub- contractor to use. No stream: was tirade to determine if other vendors amid granitic the same services in insri?' that ?re SPEDJ: contract? he issuer! as safe snare-a. The software recently developed by is highly complex in data mining information and applying proprietary analytics to uncover patterns, correlations, interventions and insights to accelerate the learning and achievement of students with disabilities. The database uses proprietary algorithms that associates local aggregated IEP data to nationally normed datasets and other normative benchmarks related to the academic and social emotional success of students with learning, attention and behavior issues. The file showed that TEA staff searched numerous web-sites and net-worked with professional associates in the special education ?eld to determine if any other vendors had software to perform similar type of data mining and analysis of data or if any other vendors can perform similar type of analysis. TEA staff could not identify any other vendors that could provide comparable services and the same detail analysis of data that is able to perform. The Academics Department prepared a memorandum justifying the proprietary contract with to Kara Belew, Deputy Commissioner of Finance. The memo outlined the work to be performed and that TEA is not aware of any other vendor with the specific expertise in special education to provide similar services. The memo was signed by Ms. Belew on April 2i, 20?. Based on the research and efforts made above, lntemal Audit believes the Academics Department made a due diligence effort to determine if other vendors could provide similar services that was able to offer. Personnel Interviewed During the Investigation: Normal Barrera, Director of Purchasing and Contracts Penny Schwinn, Deputy Commissioner of Academics Justin Porter, Executive Director of Special Populations Richard Nyankori, CEO of Christina Heitz, CEO of Cambiar Education and Sub-Contractor to SPEDX NOTE: Laurie Kash, upon advice from her attorney, said she was unable to interview at this time.