OFFICE OF INTERNAL AUDIT 404 James Robertson Parkway, Suite 190 NASHVILLE, TENNESSEE 37219 615-862-6158 Mark S. Swann Metropolitan Auditor METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY February 7, 2019 Dr. Shawn Joseph Metro Nashville Public Schools Director Dear Dr. Joseph, METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Sources of Allegations The Metropolitan Nashville Office of Internal Audit began receiving allegations about Metropolitan Nashville Public Schools’ purchasing activities in March 2018. The allegations were made through telephone calls, the Metro Nashville Fraud Waste or Abuse Hotline, and interviews. Purpose of Investigation The Metropolitan Nashville Office of Internal Audit conducts internal investigations of potential violation of governance policies established for the Metropolitan Nashville Government or investigations of potential fraud, waste, and abuse. Investigation requests are received from the management of the Metropolitan Nashville Government or tips received from the Metropolitan Nashville Government fraud, waste, and abuse hotline. Any findings or observations of potential fraud and other criminal acts would be referred to the 20th Judicial District Attorney Office, Metropolitan Nashville Police Department, or other appropriate agency. Any findings related to employee misconduct, waste, abuse; as well as process inefficiencies and deficient internal controls would be forwarded to the management of the Metropolitan Nashville Government for corrective action. We conduct investigations and create reports using the Standards of the Association of Certified Fraud Examiners as a guide. The standard of “preponderance of the evidence” is used as a basis for substantiating or not substantiating an allegation. Key definitions used during investigations include: • Preponderance of Evidence – A certain set of facts “more likely than not” occurred. • Substantiated – The preponderance of the evidence collected during the investigation indicates that the incident occurred. February 7, 2019 METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Page 2 • Unsubstantiated - The evidence collected during the investigation indicates there was not a preponderance of the evidence to support the allegation or that the evidence collected during the investigation was conflicting or inconclusive. The Metropolitan Nashville Office of Internal Audit discovery of evidence is primarily from Metropolitan Nashville Government’s personnel testimonial statements, financial and operations records, and information assets (computers, email, mobile phone, and so forth). Personal private information assets and financial and operations records will be reviewed when voluntarily provided by parties involved in an investigation or contractual audit clauses facilitate such reviews. The purpose of this investigation is to determine if there were any matters of improper use of public resources by Metropolitan Nashville Public Schools that would require management action or referred to other appropriate agencies. Background This report regards the documentation of the compliance or noncompliance with particular purchasing policies, federal regulations, and state law, within the context of the allegations that were made. The new management team, assembled by Dr. Shawn Joseph, Director of Schools, July 2016, immediately began to increase the use of vendors for professional development to pursue a new direction in literacy, in an attempt to improve student achievement. This report does NOT evaluate the new trend in literacy, student achievement, methods, or specific products chosen to improve literacy. Generally, the allegations are the new management team was circumventing purchasing procedures and sometimes federal regulations, and sometimes duplicating services that were already provided, because they were receiving kickback payments from vendors. There were allegations that certain vendors were unqualified. Many of the vendors had more than one allegation, and most allegations pertained to more than one vendor. Unethical activity was suspected with the Educational Research Development Institute and Educational Research Development Institute partner companies. Educational Research Development Institute’s business is to test educational products and provide feedback. Dr. Monique Felder, Chief Academic Officer, had disclosed a small amount of fees received from Educational Research Development Institute. Sometimes the allegations arose from a lack of understanding of policies and laws. Also, the requirements of policies and regulations were not always clearly understood. Some allegations stemmed from differences of opinions on the new direction in literacy and methods to achieve it. Sometimes amounts rumored to have been paid on specific contracts have been inaccurate or unclear because there is no systematic, reliable method to separately identify expenditures for individual contracts and scopes of work within the same contract because of existing computer system limitations. Some allegations arose because knowledge of cooperative (piggybacking) contracting practices was not understood. Summary and Outcome of Investigation After performing an investigation of the allegations, and using the preponderance of evidence standard as a basis, the Office of Internal Audit believes: February 7, 2019 METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Page 3 Allegation A The allegation that consultant Bruce Taylor is not qualified and lacks credentials or qualifications is unsubstantiated. Allegation B The allegation that Metropolitan Nashville Public Schools has paid Northwest Evaluation Association $963,904, which exceeds the contract value of $911,000, is substantiated. Allegation C The allegation that Metropolitan Nashville Public Schools was recognized nationally for their climate survey they had worked on with Vanderbilt but Metropolitan Nashville Public Schools paid Panorama for the same climate survey is unsubstantiated. Allegation D The allegation that Dr. Shawn Joseph, Director of Schools, being a member of Learning Forward’s board of trustees is a conflict of interest between Metropolitan Nashville Public Schools and its participation with Learning Forward is unsubstantiated. Allegation E The allegation that Sharon Fogler is part of the Hemphill Educational Consultant (Sharon Hemphill) or that Metropolitan Nashville Public Schools split the services between these two vendors to avoid bringing a $100,000 contract to the Metropolitan Nashville Board of Public Education for approval is unsubstantiated Allegation F 1. The allegation the Edgenuity no-bid contract award failed to comply with Metropolitan Nashville Public Schools procurement procedures is unsubstantiated. 2. The allegation that Edgenuity consultants duplicates work that employees using existing Metropolitan Nashville Public Schools courses and resources could do is unsubstantiated. Allegation G The allegation the no-bid (sole source) contract award to the Educational Research Development Institute partner company, Amplify, did not comply with Metropolitan Nashville Public Schools procurement policy is unsubstantiated. Allegation H The allegation Metropolitan Nashville Public Schools employees, including Dr. Shawn Joseph, Dr. Sito Narcisse, and wife Maritza Gonzales, and others on the management team, have received undisclosed consulting fees from Educational Research Development Institute partner companies is unsubstantiated. February 7, 2019 METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Page 4 Allegation I The allegation Achievement Network was excessively billing Metropolitan Nashville Public Schools to reach the maximum amount of the contract, and the purchasing process was not followed for awarding this contract is unsubstantiated. Allegation J The allegations that Read America/Read Worldwide is managed or owned by one individual, Ebony Andrews-Hill, managed from her home and Metropolitan Nashville Public Schools is the company’s only source of income and may not exist is unsubstantiated. Allegation K The allegation that the 17-6 Request-for-Proposal process was manipulated to award the contract to Discovery Education specifically and that the cost of services from Discovery Education is "somewhere around ten times the cost of competitor services" is unsubstantiated. Allegation L The allegation that Research for Better Teaching services are split between departments; there is a separate contract providing the same service; the same vendor has multiple contracts; someone is getting a kickback; the contract was split into three agreements (one for $50, another for $50,000 and another for $12,000) to circumvent the $100,000 board approval requirement is unsubstantiated. There was more than one scope of work for Research for Better Teaching. One scope of work was less than $100,000. If that scope of work had been drafted into a contract before the work was performed, the contract would not have been subject to Metropolitan Nashville Board of Public Education approval. However, the amount paid exceeds the $25,000 per Contracts Policy FM 2.113 Revision November 2016, and there should have been a contract in place before spending the funds. Allegation M 1. The allegation that Metropolitan Nashville Public Schools paid extra inappropriate expenditures for Moreno Carrasco, a (former) management member when the new administration came in July 2016, paid them for an extended period of time with federal funds, and for "trendy air b&b's" with high costs is unsubstantiated. 2. The allegation Metropolitan Nashville Public Schools paid extended temporary housing for other employees, and used federal funds is unsubstantiated. Allegation N The allegation that Metropolitan Nashville Public Schools was preparing to execute a contract with Scholastic as a result of accepting a trip to a conference on Amelia Island, paid by Scholastic was unsubstantiated. Allegations O 1. The allegation that the Performance Matters contract is for a data warehouse, even though Metropolitan Nashville Public Schools already had an excellent one is unsubstantiated. February 7, 2019 METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Page 5 2. The allegation that the Metropolitan Nashville Board of Public Education approved a summary of contracts with Performance Matters for $1.1 million, but the actual contracts filed with the Metro Clerk’s office indicates $1.8 million between the two contracts is substantiated. However, this error does NOT appear to have been intentional. The $698,653 amount paid to Performance Matters for services between December 2016 and June 2018 was less than the $1.1 million approved by the Metropolitan Nashville Board of Public Education. Recommendation for management of the Metropolitan Nashville Public Schools to: 1. Use the more stringent policy between Metropolitan Nashville Public Schools procurement policy or the federal Uniform Grant Guidance 200.320 for purchases with federal funds. “Uniform Grant Guidance 200.320 Methods of Procurement to Be Followed” requires different methods based on threshold amounts. As of November 2016, the Metropolitan Nashville Public Schools’ purchasing policy did not allow exclusions from competition. 2. Document the process of determining the “recognized competence and integrity” when nonfederal funds are used. Tennessee Code Annotated § 12-3-1209 allows entities to choose educational consultants on the basis of “recognized competence and integrity.” 3. Implement a consistent, reliable method to track expenditures per contract and scope of work to ensure contract limits and procurement policies are followed. Existing computer system limitations should be resolved with the planned iProcurement and Oracle Enterprise Business System implementation scheduled for July 2019. Work for this request is closed. Please contact me should you have any further questions concerning this matter. Sincerely, Mark S. Swann Enclosures cc: Honorable Mayor David Briley Metropolitan Nashville Board of Public Education Metropolitan Nashville Audit Committee Jon Cooper, Director, Department of Law Theresa Costonis, Attorney, Department of Law Office of Internal Audit Metropolitan Government of Nashville and Davidson County Date Februrary 7, 2019 To Mark Swann, Metropolitan Auditor From Mary Cole, Investigator 404 James Robertson Parkway Suite 190 Post Office Box 196300 Nashville, Tennessee 37219 615-862-6110 METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION Sources of Allegations The Metropolitan Nashville Office of Internal Audit began receiving allegations about Metropolitan Nashville Public Schools’ purchasing activities in March 2018. The allegations were made through telephone calls, the Metro Nashville Fraud Waste or Abuse Hotline, and interviews. Background This report regards the documentation of the compliance or noncompliance with particular purchasing policies, federal regulations, and state law, within the context of the allegations that were made. The new management team, assembled by Dr. Shawn Joseph, Director of Schools, July 2016, immediately began to increase the use of vendors for professional development to pursue a new direction in literacy, in an attempt to improve student achievement. This report does NOT evaluate the new trend in literacy, student achievement, methods, or specific products chosen to improve literacy. Generally, the allegations are the new management team was circumventing purchasing procedures and sometimes federal regulations, and sometimes duplicating services that were already provided, because they were receiving kickback payments from vendors. There were allegations that certain vendors were unqualified. Many of the vendors had more than one allegation, and most allegations pertained to more than one vendor. Unethical activity was suspected with the Educational Research Development Institute and Educational Research Development Institute partner companies. Educational Research Development Institute’s business is to test educational products and provide feedback. Dr. Monique Felder, Chief Academic Officer, had disclosed a small amount of fees received from Educational Research Development Institute. Sometimes the allegations arose from a lack of understanding of policies and laws. Also, the requirements of policies and regulations were not always clearly understood. Some allegations stemmed from differences of opinions on the new direction in literacy and methods to achieve it. Sometimes amounts rumored to have been paid on specific contracts have been inaccurate or unclear because there is no systematic, reliable method to separately identify expenditures for individual contracts and scopes of work within the same contract because of existing computer system limitations. Some allegations arose because knowledge of cooperative (piggybacking) contracting practices was not understood. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 2 Prior Office Policies vs. Board Policies This review included the prior policies that were, at the beginning of this project, listed publicly on its website as current policies, and had also been provided for multiple previous engagements within the past year. Metropolitan Nashville Public Schools was following its policies that were publicly listed on its website as policies, but these policies were not the same as the board policies that were being revised. The policies that the board had been revising were separate policies. Those board policies that were later approved beginning January 2018 were not used in this review. Management’s Perspective Dr. Monique Felder, Chief Academic Officer, stated that their plan to improve and accelerate student achievement required a renewed, urgent focus on literacy. This renewed and urgent focus centered on the “shifts” in literacy (i.e., Three Literacy Core Actions - Text, Talk, Tasks) that are reflected in the Tennessee state standards. While the Tennessee state standards have been rigorous and existed for many years, they were not being implemented well in the district until recently. Teachers, principals, Literacy Teacher Development Specialists, and office staff who support schools needed extensive training in the Three Literacy Core Actions. Dr. Felder stated that the office staff was not sufficient for a district of its size [per the best practices by the Council of Great City Schools] and could not lead this work when first implemented because it was new to them. The district office staff were on the same learning curve as the teachers, Literacy Teacher Development Specialists, and principals. Dr. Joseph’s new administration perceived a need to act as quickly as possible. Student achievement data indicated the great need to accelerate student achievement in literacy; the school year was ready to begin; the time and, the opportunity for building staff’s capacity (i.e., PreK-12 teachers, principals, and office staff) in order to impact students' achievement in literacy positively was limited per the district's school calendar. The new administration worked deliberately and expediently to access the resources needed to build the staff's capacity to improve literacy achievement in the district. Policies, Law, Guidance Listed below are the primary policies, law, and guidance that were reviewed. See Appendix B. Metropolitan Nashville Public Schools’ Prior Policies (See Appendix B.) FM2.111 Purchasing Policy Revision, November 2016 FM2.112 Purchasing Card Program Revision, May 2014 FM2.113 Contracts Policy November 22, 2016, Revision, November 2016 FM2.113a Initiating Contracts Conflict of Interest Statement Revision, November 2009 FMp 2.129 Contracts Procedure November 22, 2016 HC 5.110 Ethics, Conflicts of Interest and Acceptance of Gifts Updated June 2015 Tennessee Code Annotated § 12-3-1203 – Purchases for other local governmental units. (a) Any municipality, county, utility district, or other local governmental unit of the state may, upon request, purchase supplies, equipment, and services for any other municipality, county, utility district, or other local governmental unit. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 3 (1) The purchases shall be made on the same terms and under the same rules and regulations as regular purchases of the purchasing entity. (2) The cost of the purchase shall be borne by the local government for which the purchase was made. (3) Where the local government making the request is required to advertise and receive bids, it shall be sufficient for those purposes that the purchasing entity comply only with its own purchasing requirements. (b) (c) (1) Any local education agency (LEA) may purchase equipment under the same terms of a legal bid initiated by any other LEA in Tennessee. (2) (A) Any LEA may purchase directly from a vendor the same equipment at the same price and under the same terms as provided in a contract for such equipment entered into by any other LEA. (B) Any LEA which purchases equipment under this subsection (b) shall directly handle payment, refunds, returns, and any other communications or requirements involved in the purchase of the equipment without involving the LEA which originated the contract. The originating LEA shall have no liability or responsibility for any purchases made by another LEA under a contract which the originating LEA negotiated and consummated. (1) Any municipality, county, utility district, or other local governmental unit of this state may purchase supplies, goods, equipment, and services under contracts or price agreements entered into by any other local governmental unit of this state. Such purchases shall be made on the same terms and under the same rules and regulations as regular purchases of the purchasing entity. Any local governmental unit that purchases supplies, goods, equipment, or services under this section shall directly handle payment, refunds, returns, and any other communication or requirements involved in the purchase without involving the local governmental unit that originated the contract. The originating local governmental unit shall have no liability or responsibility for any purchases made by another local governmental unit under a contract that the originating local governmental unit negotiated and consummated. Where any local or private act, charter, or general law requires that a local governmental unit purchase by competitive bidding, the local governmental unit may, notwithstanding the local or private act, charter, or general law, purchase without public advertisement or competitive bidding in accordance with this section. (2) This subsection (c) shall not apply to: (A) Purchases of new or unused motor vehicles, unless the motor vehicles are manufactured for a special purpose as defined in § 12-3-1208; and (B) Purchases related to any transportation infrastructure project, including, but not limited to, projects for the construction or improvement of streets, highways, bridges, tunnels, or any roadway related facility. Tennessee Code Annotated § 12-3-1205 – Cooperative purchasing agreements. (a) Any municipality, county, utility district, or other local government of the state may participate in, sponsor, conduct or administer a cooperative purchasing agreement for the procurement of any METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 4 supplies, services, or construction with one or more other local governments in accordance with an agreement entered into between the participants. (b)(1) Notwithstanding any other law to the contrary, any municipality, county, utility district, or other local government of the state may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of any goods, supplies, services, or equipment with one (1) or more other governmental entities outside this state, to the extent the laws of the other state permit the joint exercise of purchasing authority, or with an agency of the United States, to the extent federal law permits the joint exercise of purchasing authority, in accordance with an agreement entered into between or among the participants; provided, such goods, supplies, services, or equipment were procured in a manner that constitutes competitive bidding and were advertised, evaluated, and awarded by a governmental entity and made available for use by other governmental entities. Tennessee Code Annotated § 12-3-1209 (a) Requirements of professional persons or groups Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of the state, for legal services, fiscal agent, financial advisor or advisory services, educational consultant services, and similar services by professional persons or groups of high ethical standards, shall not be based upon competitive solicitations, but shall be awarded on the basis of recognized competence and integrity. The prohibition against competitive soliciting in this section shall not prohibit any entity enumerated from interviewing eligible persons or entities to determine the capabilities of such persons or entities. Code of Federal Regulations (CFR) Title 2 Grants and Agreements 2 CFR “Part 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” 200.88 Simplified Acquisition Threshold 200.318 General Procurement Standards 200.319 Competition 200.320 Methods of Procurement to Be Followed METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 5 Allegation A Consultant Bruce Taylor is not qualified and lacks credentials or qualifications. He has no background in education. Bruce Taylor Contracts 2-265207-00; August 1, 2016 – June 30, 2017; not to exceed $25,000 2-265207-01; July 1, 2017-June 30, 2018; not to exceed $80,000 Facts 1. Bruce Taylor trains on the common core standards and how to implement them. He has an extensive background in arts education. He has written books on implementing the common core standards. 2. All Bruce Taylor invoices except one were paid with federal funds. 3. The first contract was not filed with the Metropolitan Nashville Clerk until March 27, 2017, with a retroactive start date August 1, 2016. 4. Metropolitan Nashville Public Schools‘ Purchasing Policy FM 2.111, revised November 2016, exempts professional services provided by individuals from a competitive award, "except in the case where federal funds are to be used for the purchase." Federal funds were used on both contracts. Therefore, the contracts were not exempt from competitive award per Policy FM 2.111. 5. In addition, the Code of Federal Regulations, Part 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 200.320(b), Procurement by small purchase procedures applies to contracts over $3,500 but less than $150,000. This requirement is that “price or rate quotations must be obtained from an adequate number of qualified sources.” Discussion and Analysis Bruce Taylor has a background in arts education and is an author of published books on implementing the common core standards. However, the federal purchasing procedures should have been considered. Conclusion The allegation that consultant Bruce Taylor is not qualified and lacks credentials or qualifications is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 6 Allegation B Metropolitan Nashville Public Schools payments to Northwest Evaluation Association exceeds the contract value. Northwest Evaluation Association Contracts 2-00269-02; November 30, 2016 – June 30, 2019; not to exceed $451,000 2-00269-02A1; increases compensation by $460,000, to total not to exceed $911,000 Facts 1. Northwest Evaluation Association is a no-bid cooperative (piggybacked) contract from Shelby County, Tennessee. 2. Metropolitan Nashville Public Schools Purchasing Policy, FM 2.111, as of November 2016, states contracts issued by another Tennessee municipality or local education agency may be used as a source of purchases. Cooperative (piggybacking) contracting is a method of interlocal purchasing. Tennessee Code Annotated 12-3-1203 (b) allows other local education agency to purchase equipment under the same terms of a legal bid initiated by any other local education agency in Tennessee, and Tennessee Code Annotated 12-3-1203 (c) allows other local government units to purchase supplies, goods, equipment, and services under contracts or price agreements entered into by any local government unit of Tennessee. 3. Metropolitan Nashville Public Schools had used Northwest Evaluation Association for assessments, and individual schools could pay with their funds. The new administration gave a directive for schools to use the Northwest Evaluation Association because it was better to have a single nationally normed assessment tool to have consistent test results across the district. 4. Based on invoice dates after the contract start date, there were $964,037 in payments to Northwest Evaluation Association between February 1, 2017, and August 23, 2018. The contract amount did not include all of the assessments that the schools were directed to use. Discussion and Analysis Expenditures did increase. The Northwest Evaluation Association tests included separate licenses for Math and Reading. Initially, only the Reading portion was included in the contract not-to-exceed amount. Individual schools were able to purchase the Math assessment using their local funds. Those amounts would have been purchases beyond the contract scope. Conclusion The allegation that Metropolitan Nashville Public Schools has paid Northwest Evaluation Association $963,904, which exceeds the contract value of $911,000, is substantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 7 Allegation C Metropolitan Nashville Public Schools was recognized nationally for their climate survey they had worked on with Vanderbilt, but Metropolitan Nashville Public Schools paid Panorama for the same climate survey. Panorama Contracts 2-286109-00; March 1, 2017 – February 28, 2022; not to exceed $89,000 throughout the contract; RFP 17-8; online survey system for students, parents, teachers, and staff 2-286109-00-A1 to increase compensation, $356,000 additional funding obligated; total compensation not to exceed $445,000 Facts 1. Dr. Christine Stenson, Director of Research, Assessments, and Evaluation, provided examples of the differences among the different surveys: a. The MyStudent survey was not used after hearing in teacher focus groups that they did not find classroom-levels measures to be valid or useful. MyStudentSurvey has a cost as well. Also, when the state was paying for the pilot survey, the company lost most of the district’s survey data one semester. b. For student surveys, the Tennessee Department of Education uses a survey they developed through the Safe and Supportive Schools grant. The staff survey results are reported in simple PDFs. In Panorama, results can be viewed by quadrant, by cluster, by tier, by the supervisor, and so forth with a click of a button. To use the state PDFs in this way, a great deal of staff time would be required to figure out how to put these data together, and it would have inferior graphics. c. In addition, for state staff surveys and possibly the student survey there is little room for customization. Metropolitan Nashville Public Schools is creating surveys aligned to the strategic framework, which the state cannot do. Dr. Stenson also stated that they can get response level data to validate their survey scales, which had not been possible from the state staff survey. Because there is now response-level data, if they don’t feel that the scale is adequately capturing a concept (equity, for example, which is not captured by state surveys), they can add questions, delete them, and run statistics on them. Discussion and Analysis The contract is consistent with the description provided by Metropolitan Nashville Public Schools. Conclusion The allegation that Metropolitan Nashville Public Schools was recognized nationally for their climate survey they had worked on with Vanderbilt but Metropolitan Nashville Public Schools paid Panorama for the same climate survey is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 8 Allegation D Dr. Shawn Joseph, Director of Schools, became a member of the board of trustees of Learning Forward in December 2017 resulting in a conflict of interest between Metropolitan Nashville Public Schools and its participation with Learning Forward. Learning Forward Contract 2-428-634-00; August 1, 2016 – July 31, 2017; not to exceed, in the fiscal year executed, $64,490 Facts 1. The Learning Forward internet site states “Learning Forward is the only professional association devoted exclusively to supporting those who work in educator professional development.” 2. Dr. Shawn Joseph, Director of Schools, reported that he had been an elected board member of Learning Forward since December 2017 on his 2017 conflict of interest form disclosure signed January 19, 2018. 3. Learning Forward stated that no Metropolitan Nashville Public Schools employees had been employed or received compensation. Per Learning Forward, “Dr. Joseph has never been and is not currently an employee of Learning Forward. We have reimbursed Dr. Joseph for travel expense [$1,128 total for $567 hotel, $311 airfare, and $250 meals] to attend a Learning Forward Board of Trustees meeting.” 4. Learning Forward stated, “Metropolitan Nashville Public Schools has had some employees participate in two networks designed to collaborate with other big city school systems and solve problems of practice. These networks have been facilitated by Learning Forward. These networks have involved 22 school systems Redesign Professional Development Community and 15 school systems Student Success Learning Network (SSLN). The Redesign Professional Development Community program was funded by the Bill and Melinda Gates Foundation, and the Student Success Learning Network was a self-funded program in which each school district paid $55,000 to participate. In both cases, the funds were spent for meeting expenses, travel, hotel, annual membership to Learning Forward to provide access to tools, platforms, webinars, etc., and for coaches to manage and facilitate the meetings. No employee of Metropolitan Nashville Public Schools was paid in any way except to be reimbursed for travel expenses as contemplated by each of the network programs.“ 5. Metropolitan Nashville Public Schools paid Learning Forward $65,963 in the fiscal year 2017 and $50,159 in the fiscal year 2018. Discussion and Analysis It is not a conflict of interest for Dr. Shawn Joseph, Director of Schools, to serve on the board of Learning Forward in an unpaid position. There was no evidence that Dr. Joseph, Director of Schools, received monetary compensation for being on the board of trustees, except for travel reimbursement in December 2017 for attending one board meeting. He became a board member in December 2017 after the last Learning Forward invoice date of November 20, 2017. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 9 Conclusion The allegation that Dr. Shawn Joseph, Director of Schools, being a member of Learning Forward’s board of trustees is a conflict of interest between Metropolitan Nashville Public Schools and its participation with Learning Forward is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 10 Allegation E Sharon Fogler, an educational consultant, is alleged to be part of the Hemphill Educational Consultant (Sharon Hemphill) or that Metropolitan Nashville Public Schools split the services between these two vendors to avoid bringing a $100,000 contract to the Metropolitan Nashville Board of Public Education for approval. Sharon Fogler, and Sharon Hemphill, Educational Consultant, Contracts Sharon Fogler 2-288071-00; April 1, 2017 – July 31, 2018; not to exceed $50,000; paid $51,188.15 from April 11, 2017 – March 14, 2018 Sharon Hemphill, Hemphill Educational Consultant 2-26293-00; August 1, 2016 –July 31, 2017, not to exceed $50,000 2-262923-00-OOA1; April 1, 2017 – July 31, 2018, extends the dates only Facts 1. Sharon Hemphill, Hemphill Educational Consultant, contract dates are August 31, 2016, through July 31, 2017. Ms. Hemphill was contracted, and then the amount of work that Metropolitan Nashville Public Schools wanted to accomplish increased. Sharon Fogler was contracted to assist in the work. They both do the same type of work, but they are separate companies. 2. Dr. Monique Felder, Chief Academic Officer, explained that she was familiar with Ms. Hemphill because she had worked with her previously, and Ms. Fogler was also involved in the work. When Metropolitan Nashville Public Schools needed the same type of work, they believed Ms. Hemphill was qualified and experienced, so they completed a contract with her. Since work was needed at more schools, Ms. Fogler was also contracted to do the work. Ms. Fogler’s contract and payments began eight months after Ms. Hemphill’s first contract. Ms. Hemphill’s amendment in April 2017 only extended the time available to do the work. 3. Accurint for Government Comprehensive Report(s) on Hemphill Consultants, Sharon Hemphill, and Sharon Fogler indicate that both are two separate people and two separate businesses. Discussion and Analysis Since the contracts were not federally funded, the state law that requires consultants to be selected based on “competence and integrity” applies (Tennessee Code Annotated § 12-3-1209). Dr. Monique Felder, Chief Academic Officer, stated these vendors were selected based on prior experience with their work, but the selection process was not documented. Ms. Fogler's contract and payments begin eight months after Ms. Hemphill's first contract. Ms. Hemphill's amendment in April 2017 only extends the time available to do the work. Conclusion The allegation that Sharon Fogler is part of the Hemphill Educational Consultant (Sharon Hemphill) or that Metropolitan Nashville Public Schools split the services between these two vendors to avoid METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 11 bringing a $100,000 contract to the Metropolitan Nashville Board of Public Education for approval is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 12 Allegation F 1. Metropolitan Nashville Public Schools no-bid contract award to Edgenuity failed to comply with Metropolitan Nashville Public Schools procurement procedures. 2. Edgenuity consultants duplicates work that employees using existing Metropolitan Nashville Public Schools courses and resources could do. Edgenuity was used to provide online courses for classes where students had substitute teachers in the classes. Metropolitan Nashville Public Schools has an existing virtual school. Edgenuity Contract 2-574937-02; September 13, 2017 – June 30, 2018; not to exceed $180,000 Facts 1. Metropolitan Nashville Public Schools provides different options for students who have failed a class to get credit for the class. A student could use the Metropolitan Nashville Public Schools virtual school online class for credit recovery. However, this option may not be the best option for a student who did not pass a “face-to-face” class. Metropolitan Nashville Public Schools online classes would be more suited to students who can work more independently and are generally not used for credit recovery. Edgenuity is the most structured option, which would be more suited for students who work less independently. Edgenuity also meets the National Collegiate Athletic Association requirements for potential college athletes. 2. Edgenuity also provides certificated teachers for online classes for first-time class credit for teacher vacancies. A non-certificated teacher, such as a substitute teacher, is only allowed to teach for 20 days in a class, per state requirements. After that, there must be a certificated teacher in the classroom. Per discussion with Dr. Sito Narcisse, Chief of Schools, and Lisa Coons, Executive Director of Learning Technology and Library Services, there were many teacher vacancies at the beginning of the 2017-2018 school year. Dr. Narcisse considered some vacancies to be more critical than others, such as vacancies in math classes. 3. Dr. Sito Narcisse, Chief of Schools, instructed the district to use Edgenuity for credit recovery on August 6, 2017. Discussion and Analysis Metropolitan Nashville Public Schools considered the Edgenuity contract an emergency contract due to teacher vacancies and awarded it as an emergency contract. However, there was no form to document how the decision was made. Metropolitan Nashville Public Schools Policy FM 2.111 requires a “written determination of the basis for the emergency, and for the selection of the vendor.” The Purchasing Director has since implemented a form to document emergency contracts. Federal funds have been paid to this vendor from August 2017 to August 2018. Federal regulations [Code of Federal Regulations 200.320(f)(2)] allow for emergency purchases. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 13 Conclusion 1. The allegation the Edgenuity no-bid contract award failed to comply with Metropolitan Nashville Public Schools procurement procedures is unsubstantiated. 2. The allegation that Edgenuity consultants duplicates work that employees using existing Metropolitan Nashville Public Schools courses and resources could do is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 14 Allegation G The no-bid (sole source) contract award to the Educational Research Development Institute partner company, Amplify, did not comply with Metropolitan Nashville Public Schools procurement policy. Amplify Contract 2-167642-06; November 29, 2017-November 28, 2022; not to exceed $150,725 Facts 1. Amplify is listed on the Educational Research Development Institute website as a partner company. 2. This contract was awarded sole source. Amplify has a license to be “the only commercial provider of professional development and customer support” for the Core Knowledge Language Arts Program for grades PreK-5. There was a sole source form to document the license. However, the search for the product was not documented before the sole source product was chosen. 3. Lisa Coons, Executive Director of School Support and Instruction stated, “Schools of Innovation, the Core Knowledge Language Arts Program was chosen because we looked for a curriculum that had high ratings in the knowledge building and the foundational components of the curricula. Also, we were finding a misalignment between activities and tasks teachers were asking students to do in comparison to standards expected. So we looked for a curriculum that had a high rating in activities/tasks. Finally, our teachers reported high levels of planning, so we also wanted a curriculum that had easier teacher usability. Core Knowledge Language Arts Program had the highest ratings for foundational skills and knowledge-building curricula; and therefore, we chose this curriculum." Discussion and Analysis Federal funds were spent ($53,121 for invoice dates in October 2017; $9,418 for invoice dates in May 2018). Federal regulations allow sole source purchases, but the process of the selection of the specific product should be documented. Code of Federal Regulation 200.320(f)(4) states “After solicitation of a number of sources, competition is determined inadequate.” Metropolitan Nashville Public Schools’ explanation for the sole source purchase is consistent with the product ratings. However, the research for the product was not documented before the purchase was made. Conclusion The allegation the no-bid (sole source) contract award to the Educational Research Development Institute partner company, Amplify, did not comply with Metropolitan Nashville Public Schools procurement policy is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 15 Allegation H Metropolitan Nashville Public Schools employees, including Dr. Shawn Joseph, Dr. Sito Narcisse, and wife Maritza Gonzales and others in Dr. Shawn Joseph’s management team, have received undisclosed consulting fees from Education Research and Development Institute partner companies. Education Research and Development Institute and Educational Research Development Institute Partner Companies Facts 1. ERDI reported that they did not pay any Metropolitan Nashville Public Schools or Joseph and Associates, LLC, other than consulting fees to Dr. Monique Felder, Chief Academic Officer. Per ERDI, Dr. Felder received these amounts: Fall 2016 between September 30, 2016, and October 2, 2016. • • • Airline reimbursement - $551 Ground transportation stipend - $70 Honorarium - $2,000 Spring 2017 between April 7, 2017, and April 9, 2017 • • • Airline reimbursement - $284 Ground transportation stipend - $70 Honorarium - $2,000 Fall 2017 between September 29, 2017, and October 1, 2017 • • • Airline reimbursement - $416 Ground transportation stipend - $70 Honorarium - $2,000 Dr. Felder did an addendum to her conflict of interest form for the calendar year 2017, on October 15, 2018, because she had disclosed possible future compensation from Educational Research Development Institute prospectively on her prior conflict of interest form on January 30, 2017. The conflict of interest forms should be done retrospectively for the preceding calendar year. The amounts Dr. Felder disclosed on her addendum are the same, except for not listing the two ground transportation amounts, $70 each. This difference is immaterial, and we consider her disclosure in agreement with our reported amounts from Educational Research Development Institute. 2. On November 29, 2018, Dan Meaney, Financial Manager, Panasonic Foundation indicated there were no payments to Metropolitan Nashville Public Schools employees or board members. 3. Gary Appenfelder, former Purchasing Director, stated that there was no request for proposal since this company is exempt due to being an educational consultant and the vendor was selected by Dr. Shawn Joseph upon his arrival. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 16 Discussion and Analysis Since the vendor was not paid with federal funds, the Tennessee Code Annotated §12-3-1209 is permitting consultants to be chosen based on recognized competence and integrity instead of competitive bidding applies. Conclusion The allegation Metropolitan Nashville Public Schools employees, including Dr. Shawn Joseph, Dr. Sito Narcisse, and wife Maritza Gonzales, and others on the management team, have received undisclosed consulting fees from Educational Research Development Institute partner companies is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 17 Allegation I Achievement Network was excessively billing Metropolitan Nashville Public Schools to reach the maximum amount of the contract, and the purchasing process was not followed for awarding this contract. Achievement Network Contracts 2-133751-00; May 14, 2014 – June 30, 2017; RFP 13-17; fixed price, indefinite quantity, no not-toexceed value; for digital educational products 2-133751-00A1; extends the term through May 13, 2019 Facts 1. Per the contract and amendment, there was no maximum not-to-exceed value. The contract was fixed price, indefinite quantity. The contract was awarded by a request for proposal and approved by the Metropolitan Nashville Board of Public Education at the May 13, 2014, meeting. 2. The contract had no maximum value, but Metropolitan Nashville Public Schools issued a purchase order for $90,000 for the year. 3. Achievement Network billed on an annual fee basis. Lori Scobey, Administrative Assistant to the Executive Officer of Curriculum and Instruction, and Katea Jones, Executive Assistant to the Chief Academic Officer, realized that Achievement Network had not sent monthly invoices and then they received invoices that listed, for example, one phone call or service for an amount that appeared excessive. 4. There was a billing dispute between Achievement Network and Metropolitan Nashville Public Schools that was resolved. Discussion and Analysis Management (including Dr. Monique Felder, Chief Academic Officer, Dr. David Williams, Executive Officer of Curriculum and Instruction, and Jeff Gossage, Purchasing Director) held discussions with the vendor, and the billing dispute was resolved. The contract was awarded using a request for proposal and approved by the Metropolitan Nashville Board of Public Education. Conclusion The allegation Achievement Network was excessively billing Metropolitan Nashville Public Schools to reach the maximum amount of the contract, and the purchasing process was not followed for awarding this contract is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 18 Allegation J Read America/Read Worldwide is managed or owned by one individual, Ebony Andrews-Hill, managed from her home, and Metropolitan Nashville Public Schools is the company’s only source of income. The individual’s income was alleged to be about $100,000, and the Metropolitan Nashville Public Schools contract was $150,000. There is no online footprint of the company or the owner. The contracted vendor may not exist. Read America/Read Worldwide Contract 2-289987-00; August 9, 2017 – June 30, 2018; not to exceed $150,000 Facts 1. An Accurint for Government report on the company was obtained. The report confirms that the company is registered online as ReadWorldwide and that ReadAmerica was started by one individual, Ebony Andrews-Hill. 2. Per the Illinois Office of the Secretary of State, LLC division, the company is registered as READ America dba READ Worldwide and has paid its fees to the Office of the Secretary of State for 2017 and 2018. Thus, the company does exist. 3. Ebony Andrews-Hill stated she is the owner; the company is a certified M/WBE company with gross income over $800,000. Discussion and Analysis The Accurint for Government report on Read America/Read Worldwide, and a discussion with the Illinois Office of the Secretary of State indicate the company was in existence at the time of the contract. Also, Ebony Andrews-Hill stated she is the owner, and the company is a certified M/WBE company with gross income over $800,000. Conclusion The allegations that Read America/Read Worldwide is managed or owned by one individual, Ebony Andrews-Hill, managed from her home, and Metropolitan Nashville Public Schools is the company’s only source of income and may not exist is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 19 Allegation K The Discovery Education Contract request for proposal process was manipulated to award the contract to Discovery Education specifically and that the cost of services from Discovery Education is "somewhere around ten times the cost of competitor services." Discovery Education Contract 2-2476804-09; August 1, 2017 – July 31, 2022; not to exceed $11,415,000; RFP 17-6 STEAM (STEM + Arts) [Science, Technology, Engineering, Math] Facts 1. Request-for-Proposal 17-6 was issued January 26, 2017. Four companies submitted proposals, Advance Education, Discovery Education, Interactive Media Publishing, and School Specialty. 2. See the initial scoring summary. RFP 17-6 (STEAM for Middle Schools) Scoring Summary Advance Education Discovery Education Interactive Media School Specialty I Specification (30) 16 27 22 19 II Price (25) 25 2 11 9 III Capacity & Scheduling (20) 15 19 16 12 3 5 1 4 10 10 9 9 VI T&C Exceptions (10) 9 2 9 9 Total 78 65 67 62 IV Financial Statements (5) V References (10) Source Metropolitan Nashville Public Schools Purchasing 3. Per the total scores, the highest to lowest score is Advance Education, Interactive Media, Discovery Education, School Specialty. 4. Since certification is the primary work of Advance Education, Gary Appenfelder, former Director of Purchasing, decided to separate the contracts for the certification portion and the implementation portion. Other bidders, beside Discovery Education, proposed subcontracting the certification portion of the work to Advance Education. The new contract with Advance Education, 2-805908-00 is for August 23, 2017, through August 22, 2020. 5. Advance Education did not offer a curriculum for the implementation work. The remaining bidders for the implementation work were Discovery Education, Interactive Media and School Specialty. The higher two remaining scores, Interactive Media and Discovery Education, were reviewed in more detail. 6. Gary Appenfelder, former Purchasing Director, stated that he performs statistics on scores, to look for outliers, to look for inconsistencies in scores among the evaluators, and to identify if one person METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 20 noticed something another person did not notice. In this case, he noticed a wider range of scores on certain categories. For example, Interactive Media individual evaluator scores on Approach and Timeline ranged from 18-25, of a possible 30. Some evaluator comments were inconsistent. Some comments were that there is no actual curriculum and that there is too much left to interpretation. On some items, the vendor did not propose to meet the requirements of the request for proposal. If there had been only one issue, this might not have caused anyone to look further. However, taken as a whole, Mr. Appenfelder questioned whether the vendor could meet their proposal and provide sufficient service. 7. Gary Appenfelder, former Purchasing Director, requested Interactive Media to do a presentation on how they could meet the items in the proposal and request for proposal. There are no minutes available from this meeting. However, Gary Appenfelder, (former) Purchasing Director, stated that the vendor did not provide substantially different information from the initial proposal. 8. Policy FMp 2.129 Contracts Procedure 4. Request for Proposal Procedure (xi.) states, "If appropriate, after initial evaluation is completed, two or more of the proposers may be selected as finalists for consideration. Interviews with, or presentations from, the finalists may be used to make final award recommendations." Therefore, having a meeting with a bidder was not a violation of policy. 9. Discovery Education’s $12,112,300 proposal exceeded certain requirements in the request for proposal. The contracted cost amount was reduced $697,000 to account for removing the certification portion that had been contracted to Advance Education and for the items that exceeded the request for proposal. 10. No bidder protested the awarding of the contract to Discovery Education. Discussion and Analysis A responsive and responsible bidder did not submit a proposal with a cost ten times lower than Discovery Education. Conclusion The allegation that the 17-6 Request-for-Proposal process was manipulated to award the contract to Discovery Education specifically and that the cost of services from Discovery Education is "somewhere around ten times the cost of competitor services" is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 21 Allegation L Research for Better Teaching contracted services are split between departments using multiple contracts to circumvent the $100,000 Metropolitan Nashville Board of Public Education approval requirement. There is a separate contract providing the same service. Someone is getting a kickback. It appeared the contract was split into three agreements (one for $50, another for $50,000 and another for $12,000) to circumvent the $100,000 board approval requirement. Research for Better Teaching No contract exists. The $147,858 expenditures for the 2017-2018 school year, which were incurred from the General Purpose School Fund only, are the subject of this review. Facts 1. As of November 7, 2018, Research for Better Teaching invoices dated between October 31, 2016, and May 21, 2018, total $172,161. 2. Dr. Monique Felder, Chief Academic Officer, stated that there were two scopes of work prepared for Research for Better Teaching. One scope was for ongoing, regular professional development for staff in coaching positions such as Literacy Teacher Development Specialists, Numeracy Coaches, and so forth, on high expectations teaching. The other scope was for ongoing, regular professional development for leaders (i.e., principals, and so forth) in 20 schools to receive in-depth and extensive professional development on topics such as Analyzing Teaching for Student Results. 3. Metropolitan Nashville Public Schools had six (not three) separate “agreements” in July 2017 with Research for Better Teaching for services (18-174.2, 18-180.1, 18-174.1, 18-180.2, 18-187, and 18252). These agreements were drafted into a draft contract that was never finalized. Five “agreements” were for the Analyzing Teaching for Student Results scope of work, including one for the vendor’s project manager providing onsite services, totaling $188,139; one “agreement” was for a separate scope of work on High Expectations Teaching, $57,497. 4. Metropolitan Nashville Public Schools Contracts Policy FM 2.113 Revision November 2016, states that a contract will be initiated when "repetitive cumulative purchases of a good or service, or from a particular vendor, are expected to exceed $25,000 during the year." Dr. Monique Felder, Chief Academic Officer, stated that she was not aware of this policy. Discussion and Analysis In February 2018, there were discussions about forming a contract (about $250,000) that was expected to be sent to the Metropolitan Nashville Board of Public Education for approval. However, the contract was never finalized. As of April 2018, the contract process was terminated due to budget priorities. Unauthorized Purchase Request (UPR) is the term that Metropolitan Nashville Public Schools developed for a form to document payments made without purchase orders. It has no reference to whether the item or service purchased was a proper item or service, or whether a contract was in place or not. Using METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 22 purchase orders is the best practice, and they should be used. When services were received without a prior requisition and purchase order, the purchasing process has been circumvented. There were three Unauthorized Purchase Requests prepared for payments to Research for Better Teaching. One, June 20, 2017, was for the payments January 2017 through June 2017, for $12,143. The second and third ones were for purchases since July 17, 2017, with signature dates September 22, 2017, and November 3, 2017. However, the scope of works were comingled on the Unauthorized Purchase Requests. Metropolitan Nashville Public Schools does not have a consistent, reliable method to track expenditures per contract, per scope of work, or per vendor in order to ensure contract limits or certain policies are met. The vendor ledger screen in the general ledger system shows the transactions with the vendor. However, the screen does not list the contract numbers for the transactions. In the case of Research for Better Teaching, there was no contract. If there had been a contract for each scope of work, with a method to track those expenditures, the amount spent per scope of work could have been easily determined. Gary Appenfelder, (former) Purchasing Director and Jeff Gossage, current Purchasing Director had explained to Dr. Monique Felder, Chief Academic Officer, what was required for the contract, purchase order, and invoice processes due to the funds already spent, the “agreements” to spend more, and that the “agreements” submitted for payment were not invoices. There are invoice dates for services provided between October 2017 and February 2018 (when discussions on forming a contract resumed). There should have been a contract per Metropolitan Nashville Public Schools Contracts Policy FM 2.113 Revision November 2016 because over $25,000 was paid. There was more than one scope of work for Research for Better Teaching. One scope of work was less than $100,000. If that scope of work had been drafted into a contract before the work was performed, the contract would not have been subject to Metropolitan Nashville Board of Public Education approval. The other scope was initially more than $100,000 per the “agreements” with Research for Better Teaching, but the amount paid was reduced. If the full amount had been drafted into a contract before the work was performed, the contract would have been subject to board approval. If only the amount paid had been drafted into a contract, the contract would not have been subject to board approval. Conclusion The allegation that Research for Better Teaching services are split between departments; there is a separate contract providing the same service; the same vendor has multiple contracts; someone is getting a kickback; the contract was split into three agreements (one for $50, another for $50,000 and another for $12,000) to circumvent the $100,000 board approval requirement is unsubstantiated. However, the amount paid exceeds the $25,000 per Contracts Policy FM 2.113 Revision November 2016, and there should have been a contract in place before spending the funds. Purchase orders should have been used in advance. Given that the Unauthorized Purchase Requests were prepared, these Unauthorized Purchase Requests should have been denoted per scope of work to reduce confusion on the amount paid per scope of work. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 23 Allegation M 1. Metropolitan Nashville Public Schools paid extra inappropriate expenditures for Moreno Carrasco, a new employee when the new administration came in July 2016, for an extended period of time with federal funds, and for "trendy air b&b's" with high costs. 2. Metropolitan Nashville Public Schools paid extended temporary housing for other employees and used federal funds. Facts 1. Per the general ledger, the moving expenses for Moreno Carrasco were less than $4,000, and for July 2016 through September 2016. The time period of transition was three months. The nightly rates of temporary housing ranged from $29 to $72. 2. Per the general ledger search, only the operating fund had moving expenses; federal funds were not charged. 3. Dr. Shawn Joseph’s employment contract allowed moving expenses and temporary housing costs. All were paid by October 14, 2016. 4. Dr. Sito Narcisse and Dr. Monique Felder were the only two Chief's whose contracts required moving expenses. Their contracts did not include temporary housing costs. 5. Chief Jana Carlisle had moving expenses paid September 2016, and Moreno Carrasco had moving expenses paid September 2016. 6. Dr. Monique Felder was not named on a reimbursement. Discussion and Analysis Some moving expenses were paid to other staff in addition to the Chief positions. However, these staff did not have employment contracts. All of the moving expenses for the new administration were completed by the end of October 2016. Moving expenses were only charged to the operating fund, not federal funds. Charges were paid within four months of the change in administration. Conclusion 1. The allegation that Metropolitan Nashville Public Schools paid extra inappropriate expenditures for Moreno Carrasco, a new employee when the new administration came in July 2016, for an extended period of time with federal funds, and for "trendy air b&b's" with high costs is unsubstantiated. 2. The allegation Metropolitan Nashville Public Schools paid extended temporary housing for other employees, and used federal funds is unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 24 Allegation N The Metropolitan Nashville Public Schools was preparing to execute a contract with Scholastic as a result of accepting a trip to a 2017 conference on Amelia Island, paid by Scholastic. Scholastic Contracts 2-78641304; July 24, 2015 – July 31, 2018; not to exceed $300,000 fiscal year (issued) 2-78641304A1; July 24, 2015 – July 31, 2018; changes topics of training provided 2-78641304A2; July 24, 2015 –July 23, 2020; extends the term to July 23, 2020 Facts 1. The Scholastic Literacy Summit was February 12-15, 2017, at the Ritz Carlton Amelia Island. Seven of the ten Metropolitan Nashville Public Schools’ conference attendees arrived in Jacksonville, Florida on February 11, 2017. 2. Metropolitan Nashville Public Schools initially paid the transportation to the event. However, they did not pay the remainder of the costs, mostly hotel rooms, until a year later after a public records request for documentation of the payment. The invoice was paid with payment number PT380618, May 2, 2018, for $14,333.40 (10 staff, for $1,433.34 each). This was for four nights of hotel, ground transportation, and meals for the conference for 10 participants. 3. Scholastic reserved rooms at a conference discounted rate. About one week after the trip, on February 22, 2017, a local news investigative reporter published an article about the trip taken to the Ritz Carlton hotel at Amelia Island. The article stated that Metropolitan Nashville Public Schools paid for their trip. 4. There was documentation in one email, before the conference, where a staff person told the Scholastic liaison that Scholastic could invoice for an alternate hotel on the first night of the conference since the host hotel had no more availability. 5. In a different email, after the conference, in March 2017, Merrie Clark, a Federal Programs Office member, on March 8, 2017, instructed staff, Brenda Stone, to approve and process the invoices received on March 3, 2017, for the rooms. However, Ms. Stone did not do it. Ms. Stone stated that she must have forgotten and she had a personal family emergency during that time. No further follow up was done until the 2018 public records request for documentation of payment of the rooms. 6. There was a scope of work created either beginning at the conference or completed shortly after the conference. “A Professional Learning Proposal Submitted by Scholastic Education to Metro Nashville Public Schools, February 20, 2017” was for a PreK-4 Summer Institute 2017. 7. The administration discussed placing a potential $1 million amendment to the existing $300,000 contract with Scholastic on the March 28, 2017, Metropolitan Nashville Public Schools Board of Public Education meeting agenda. The Vice-Chair of the board said she would not approve such a METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 25 large contract since the Amelia Island trip had just been in the news. The admendment did not move forward for consideration by the Metropolitan Nashville Board of Public Education. Discussion and Analysis Exhibit A - Scholastic Events Timeline Even though there is one email before the trip occurred, that mentions an invoice for at least the first night of some rooms; Metropolitan Nashville Public Schools did not reimburse Scholastic for any of their rooms until over a year later in May 2018. Testimonial evidence indicates the late payment was due to staff error in processing the invoices because of a family emergency. The potential expenditure of $1 million that would require a formal process of sealed bids or competitive proposals never moved forward for consideration by the Metropolitan Nashville Board of Public Education. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 26 Scholastic Intentions To Collect The Reimbursement Or Not Scholastic did not follow up to collect the reimbursement. Scholastic stated that many schools have no conflict of interest in accepting the compensation. Scholastic records the reimbursements received as a reduction of expenses, instead of revenue, and therefore the uncollected reimbursements would not be reflected on a report such as an accounts receivable aging report. Since it is not a major concern for Scholastic, Scholastic did not follow up to collect the reimbursement. The discussion of a potential $1 million Scholastic contract without sealed bids and competitive proposal shortly after the Amelia Island conference can create an appearance of a conflict of interest for some citizens when viewed in conjunction with the 13-month delay in payment for the hotel expenses by Metropolitan Nashville Public Schools. Conclusion The allegation that Metropolitan Nashville Public Schools was preparing to execute a contract with Scholastic as a result of accepting a trip to a conference on Amelia Island, paid by Scholastic was unsubstantiated. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 27 Allegations O 1. The Performance Matters contract is for a data warehouse, even though Metropolitan Nashville Public Schools already had an excellent one. 2. The Metropolitan Nashville Board of Public Education approved a summary of contracts with Performance Matters for $1.1 million, but the actual contracts filed with the Metropolitan Nashville Clerk’s Office indicates $1.8 million between the two contracts. Performance Matters Contracts True North Logic Professional Development 2-276664-00; November 20, 2016- June 30, 2019; not to exceed FY 2016-2017 $0 and Future Years $845,651 Contract for a “contractor-hosted web-based software platform for managing and scheduling professional development and employee growth management” [This contract is the one commonly known as the contract for professional development (True North Logic) and is a cooperative (piggyback) contract from Shelby County Schools.] [Contract approved by the board in summary. ] 2-276664-00A1 Amendment #1 extends the contract term to June 30, 2019, and increases compensation by $160,000 to reach a new not to exceed value $690,004. Contract is for contractor’s TrueNorthLogic personalized professional development management platform. [An apparent error was made because the effective decrease in compensation was $155,647, which rounds to a decrease of $160,000.] Unify Student Assessment System 2-276664-01; November 30, 2016 – June 30, 2019; not to exceed $1,000,000 Contract for “an Authoring platform, Test Element Bank, Assessment Delivery and Reporting System License, Maintenance, Support, and Professional Services, via Contractor’s Hosting Environment” [This contract is the one commonly known as the contract for student assessment system (Unify), and is a cooperative (piggyback) contract from Orange County, Florida.] [Contract approved by the board in summary included in the $1.1 million]. Pearson Contract 2-694598-01 NCS Pearson; May 1, 2017 – June 30, 2018; not to exceed $370,062 Contract for “Month-to-month continuation of services, as needed, from Contractor’s Instructional Management Suite and PD (Professional Development) Planner Products.” [This contract is the one commonly known as the month-to-month provision because the PD Planner product was being discontinued and Metropolitan Nashville Public Schools was looking for a replacement.] Facts 1. Metropolitan Nashville Public Schools had a contract with Pearson for the PD Planner product. However, Pearson announced (in summer or fall 2016) that the product would be discontinued. Also, the Metropolitan Nashville Public Schools contract was going to expire. Metropolitan Nashville Public Schools amended the contract (2-694598-01) to continue on a month-to-month basis while a METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 28 replacement product could be located and implemented. Metropolitan Nashville Public Schools hoped to implement a product by the start of the calendar year 2017. Metropolitan Nashville Public Schools had been planning to look for a professional development system, but there was not as much time urgency. 2. Performance Matters sells both a student assessment system and a professional development system. Performance Matters had contracts with Orange County, Florida (student assessment system), and Shelby County Schools (professional development system) that had been competitively bid. Metropolitan Nashville Public Schools decided to use cooperative (piggyback) contracts from each of those contracts because a formal Request for Proposal process would have taken much longer. 3. Metropolitan Nashville Public Schools Purchasing Policy, FM 2.111, as of November 2016, states contracts issued by another Tennessee municipality or local education agency may be used as a source of purchases. Cooperative (piggybacking) contracting is a method of interlocal purchasing. Tennessee Code Annotated 12-3-1203 (b) allows other local education agency to purchase equipment under the same terms of a legal bid initiated by any other local education agency in Tennessee, and Tennessee Code Annotated 12-3-1203 (c) allows other local government units to purchase supplies, goods, equipment, and services under contracts or price agreements entered into by any local government unit of Tennessee. Discussion and Analysis Neither of the Performance Matters contracts states it is for a data warehouse. Metropolitan Nashville Public Schools stated that they still use their original data warehouse and have made upgrades to it. Performance Matters does sell a smaller data warehouse type of product, but Metropolitan Nashville Public Schools believes that the product is not sufficient for their needs. Metropolitan Nashville Public Schools purchasing staff made an error in the amounts of the contracts because they inadvertently listed the end dates as 2019 in the contracts, not 2018 as approved by the Metropolitan Nashville Board of Public Education. Since the two contracts were with the same company, the contracts amounts were combined into a summary on the consent agenda. The total not-to-exceed amount in the contracts were $1,215,713, but the Metropolitan Nashville Board of Public Education had approved $1.1 million. The $698,653 amount paid to Performance Matters for services between December 2016 and June 2018 was less than the $1.1 million approved by the Metropolitan Nashville Board of Public Education. The professional development system, True North Logic, was procured using Shelby County Schools existing competitively bid solicitation. However, the student assessment system, Unify, procured using an Orange County, Florida solicitated contract does not comply with the requirements cooperative purchases using other local government solicitations and resulting contract terms should be limited to Tennessee government units. Since no federal funds were used, the Tennessee Code Annotated § 12-3-1209 allows consultants to be chosen based on “competence and integrity” instead of competitive bidding applies. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 29 Conclusion 1. The allegation that the Performance Matters contract is for a data warehouse, even though Metropolitan Nashville Public Schools already had an excellent one is unsubstantiated. 2. The allegation that the Metropolitan Nashville Board of Public Education approved a summary of contracts with Performance Matters for $1.1 million, but the actual contracts filed with the Metro Clerk’s office indicates $1.8 million between the two contracts is substantiated. However, this error does NOT appear to have been intentional. The $698,653 amount paid to Performance Matters for services between December 2016 and June 2018 was less than the $1.1 million approved by the Metropolitan Nashville Board of Public Education. METROPOLITAN NASHVILLE PUBLIC SCHOOLS PROCUREMENT INVESTIGATION (CASE2018-007) February 7, 2019 Page 30 Investigators Assigned Mary Cole, CPA, CFE, CISA, CGFM James Carson, CIA, CFE (Quality Assurance) Mark Swann, CPA, CIA, CISA, CMFO (Quality Assurance) Purpose of Investigation The Metropolitan Nashville Office of Internal Audit conducts internal investigations of potential violation of governance policies established for the Metropolitan Nashville Government or investigations of potential fraud, waste, and abuse. Investigation requests are received from the management of the Metropolitan Nashville Government or tips received from the Metropolitan Nashville Government fraud, waste, and abuse hotline. Any findings or observations of potential fraud and other criminal acts would be referred to the 20th Judicial District Attorney Office, Metropolitan Nashville Police Department, or other appropriate agency. Any findings related to employee misconduct, waste, abuse; as well as process inefficiencies and deficient internal controls would be forwarded to the management of the Metropolitan Nashville Government for corrective action. We conduct investigations and create reports using the Standards of the Association of Certified Fraud Examiners as a guide. The standard of “preponderance of the evidence” is used as a basis for substantiating or not substantiating an allegation. Key definitions used during investigations include • Preponderance of Evidence – A certain set of facts “more likely than not” occurred. • Substantiated – The preponderance of the evidence collected during the investigation indicates that the incident occurred. • Unsubstantiated - The evidence collected during the investigation indicates there was not a preponderance of the evidence to support the allegation or that the evidence obtained in the inquiry was conflicting or inconclusive. The Metropolitan Nashville Office of Internal Audit discovery of evidence is primarily from Metropolitan Nashville Public Schools’ financial and operations records, interviews and discussions with current employees, prior employees, and certain vendors, as well as individuals who wish to remain anonymous. Personal or private information, assets, and financial and operations records will be reviewed when voluntarily provided by parties involved in an investigation, or contractual audit clauses facilitate such reviews. The purpose of this investigation is to determine if the events described in the allegations occurred or did not occur. APPENDIX A – RECOMMENDATIONS AND MANAGEMENT CORRECTIVE ACTION PLAN Recommendation for Metropolitan Nashville Public Schools to: 1. Use the more stringent policy between Metropolitan Nashville Public Schools procurement policy or the federal Uniform Grant Guidance 200.320 for purchases with federal funds. “Uniform Grant Guidance 200.320 Methods of Procurement to Be Followed” requires different methods based on threshold amounts. As of November 2016, the Metropolitan Nashville Public Schools’ purchasing policy did not allow exclusions from competition. 2. Document the process of determining the “recognized competence and integrity” when nonfederal funds are used. Tennessee Code Annotated § 12-3-1209 allows entities to choose educational consultants on the basis of “recognized competence and integrity.” 3. Implement a consistent, reliable method to track expenditures per contract and scope of work to ensure contract limits and procurement policies are followed. Existing computer system limitations should be resolved with the planned iProcurement and Oracle Enterprise Business System implementation scheduled for July 2019. APPENDIX B – METROPOLITAN NASHVILLE PUBLIC SCHOOLS’ PROCUREMENT POLICIES Metropolitan Nashville Public Schools' prior procurement policies start on the next page. • FM2.111 Purchasing Policy Revision, November 2016 • FM2.112 Purchasing Card Program Revision, May 2014 • FM2.113 Contracts Policy November 22, 2016, Revision, November 2016 • FM2.113a Initiating Contracts Conflict of Interest Statement Revision, November 2009 • FMp 2.129 Contracts Procedure November 22, 2016 • HC 5.110 Ethics, Conflicts of Interest and Acceptance of Gifts Updated June 2015 Purchasing  Policy   FM  2.111                                                             ______________________________________________________________________             Purchasing  Policies  -­  General   The  MNPS  Board  of  Education  (MNPS)  Board  of  Public  Education  (MBPE)   Executive  Expectations  EE-­7  includes  the  following  guidance  for  the   establishment  of  this  policy:     Seek  approval  of  the  Board  before  committing  to  any  single   expenditure  greater  than  $100,000.     Commit  to  the  following  before  making  purchases:   -   Exercise  reasonable  precaution  against  conflicts  of   interest.  See  HR  5.110  Ethics,  Conflicts  of  Interest,  and   Acceptance  of  Gifts.  For  any  federally  funded  purchase,   any  potential  conflict  of  interest  must  be  reported  in   writing  to  the  awarding  agency.   -   Consider  comparative  prices  based  on  items  of  similar   quality.       Revision  History   November  2016   March  2013   April  2011   December  2009   November  2009   April  2009   August  2008     Review   Annually     Date  Last   Reviewed   November  2016         -   Consider  a  balance  between  long-­term  quality  and  cost.   Competitive  bidding  procedures,  as  described  below,  must  be  used  for  the   purchase  of  all  supplies,  materials,  equipment,  and  services  unless  the   purchase  is  exempt  from  competitive  award,  as  defined  herein.     Sources  of  Purchases   The  need  for  the  acquisition  (purchase)  of  goods  and  services  (excluding  construction   services)  may  be  identified  by  any  MNPS  employee  and  the  employee  may  initiate  the   purchase  when  authorized  by  his/her  school  principal  or  department  head.  School   needs  are  determined  by  the  principal  and/or  leadership  team  and  should  be  included   in  the  School  Improvement  Plan  (SIP).  All  Federal  Program  purchases  must  have  the   approval  of  the  Executive  Director  of  Federal  Programs  or  his/her  designee.   Construction  services  are  purchased  and  administered  by  the  MNPS  Facility  Planning   and  Construction  Department.  Procurement  sources  shall  be  used  in  the  following   sequence  to  meet  the  need:   1       Purchasing  Policy   FM  2.111         •   Surplus  goods  available  from  MNPS,  other  departments  of  the  Metropolitan   Government  of  Nashville  and    Davidson  County  (Metro),  the  State  of   Tennessee  and  the  United  States  Government.   •   Contracts  issued  by  MNPS.     Contracts  issued  by  the  government  of  Metropolitan  Nashville  and  Davidson   County,  the  State  of  Tennessee,  another  Tennessee  municipality  or  Local   Education  Agencies  (LEA),  and  of  Regional  or  National  Purchasing   Cooperatives.  Contracts  (other  than  those  issued  by  MNPS,  Metro,  the   State  of  Tennessee)  must  be  approved  by  the  MNPS  Director  of   Purchasing  before  relying  on  them  for  MNPS  purchases.   •   Any  vendor  awarded  a  purchase  resulting  from  the  application  of   MNPS  competition  requirements  defined  in  this  policy.   •   Any  vendor  awarded  a  purchase  or  contract  for  goods  and/or  services  not   requiring  competition.   Surplus  Goods   The   MNPS  Fixed  Assets  Department  manages  the  inventory  of  surplus  goods  and   may  know  of  the  availability  of  surplus  goods  in  the  inventories  of  the  State  of   Tennessee  and  the  U.S.  Government.  Employees  shall  first  attempt  to  meet  their   needs  from  these  inventories  by  contacting  the  Fixed  Assets  Department.  Surplus   goods  in  the  inventory  of  MNPS  Fixed  Assets  Department  are  available  at  no  cost  and   without  limit  unless  limited  stocks  are  allocated  among  known  interested  schools  and   departments  to  achieve  an  equitable  distribution.  The  State  and  U.S.  Government  may   require  payment  for  the  acquisition  of  surplus  goods  from  their  inventories.  No   competition  is  required  for  the  acquisition  of  surplus  goods.   Competitive  Requirements  for  Purchases   Schools  and  departments  needing  goods  and  services  that  cannot  be  acquired  from   surplus  inventories  or  from  approved  contracts  shall  comply  with  competition   requirements  stated  below.  These  requirements  differ  depending  upon  the  estimated   value  of  the  quantity  or  amount  of  the  goods  or  services  expected  to  be  required  for   the  foreseeable  future,  not  to  exceed  one  year.  All  procurement  transactions  must  be   conducted  in  a  manner  providing  full  and  open  competition,  unless  exempted  from   competition  as  defined  in  this  Policy.   •   Competition  Requirements  for  Purchases  Less  Than  $3,500   All  purchases  less  than  $3,500  shall  be  awarded  to  a  responsible  and   responsive  vendor  quoting  a  price  considered  to  be  reasonable  by  the  MNPS   employee  initiating  the  purchase.  The  vendor  may  submit  the  quotation   verbally  or  in  writing.     •   Competition  Requirements  for  Purchases  of  $3,500  to  less  than  $25,000   2       Purchasing  Policy   FM  2.111         All  purchases  of  $3,500  to  less  than  $25,000  shall  be  awarded  to  the   responsible  and  responsive  vendor  quoting  the  lowest  reasonable  price.   Quotations  or  Bids  must  be  solicited  from  at  least  three  vendors  who  can   reasonably  be  expected  to  have  the  ability  to  supply  the  required  goods  or   services.  The  quotations  may  be  either  verbal  or  in  writing.  If  verbal,  the   quotations  must  be  documented  (e.g.  notes  attached  to  the  requisition).       •   Competition  Requirements  for  Purchases  of  $25,000  or  greater   All  purchases  of  $25,000  or  greater  shall  be  awarded  by  MNPS  Purchasing   using  sealed  bids  (ITBs)  or  competitive  sealed  proposals  (RFPs).  A  MNPS   Contract  Agent  shall  conduct  the  solicitation  and  award  in  accordance  with   FMp  2.129  Contracts  Procedure.     For  purchases  supported  with  federal  funds  and  valued  at  $150,000  or  more,   the  Contract  Agent  must  conduct  a  cost  or  price  analysis  and  retain  evidence   of  the  analysis  in  the  purchase  file.       Responsible  and  Responsive  Vendor   A  responsible  vendor  is  one  who  can  fulfill  all  the  requirements  of  the  purchase  and   who  has  the  integrity  and  reliability  to  assure  performance.  A  responsive  vendor  is  one   whose  quotation  meets  all  the  terms,  conditions  and  specifications  of  the  purchase   solicitation.   Prior  to  requesting  a  new  vendor  activation  in  the  Metro  Enterprise  One  System,   MNPS  Purchasing  will  confirm  that  the  vendor  is  not  on  the  U.S.  Government’s   Excluded  Parties  List  (found  at  www.sam.gov).       Purchases  not  Requiring  Competition   The  acquisition  of  goods  or  services  that  are  available  from  only  one  vendor  or  one   brand  (sole  source),  or  that  are  needed  on  an  emergency  basis,  are  exempt  from   competition  requirements.  For  any  item/service  that  is  exempt  from  competition,  if  a   single  purchase  is  to  exceed  $25,000,  the  MNPS  Purchasing  Department  may   exercise  the  option  to  validate/justify  the  total  cost  by  appropriate  means.     •   Sole  Source  Purchases   A  sole  source  purchase  is  one  where  there  is  only  one  vendor  capable  of   providing  an  item  or  service,  or  its  functional  equivalent,  and  therefore  it  is  not   possible  to  obtain  competitive  bids.  Specifying  a  Brand  Name  is  not  justification   for  a  sole  source  determination.  Creating  a  specification  that  includes   functionality  or  attributes  beyond  what  is  operationally  necessary,  for  the   purpose  of  restricting  competition  is  not  justification  for  a  sole  source   determination.  The  recommendation/request  for  a  sole  source  determination   must  be  approved  by  the  MNPS  Director  of  Purchasing  before  the  purchase   3       Purchasing  Policy   FM  2.111         is  awarded.  Schools  and  departments  may  request  sole  source  status  for   procurement  by  submitting  the  Sole  Source  Justification  Form  (attached)  to   MNPS  Purchasing.       •   Purchases  Exempt  from  Competitive  Award       Goods  and  services  exempt  from  competitive  award,  except  in  the  case   where  federal  funds  are  to  be  used  for  the  purchase,  include:   -   Maintenance  of  high  technology  equipment  or  software,  including  copy   machines   -   Where  the  compatibility  of  equipment,  accessories,  or  replacement   parts  is  of  paramount  importance   -   Where  a  sole  supplier’s  product  is  needed  for  trial  use  or  testing   -   Where  a  sole  supplier’s  product  is  to  be  purchased  for  resale   -   Postage  and  services  purchased  from  the  U.S.  Postal  Service   -   Freight   -   Advertising  and  services  in  any  commercially  available  media  (radio,   television,  newspaper,  billboard,  internet,  etc.)   -   Automobile  licenses  and  titles   -   Subscriptions   -   Professional  Entertainers  or  entertainment  services  (e.g.  rental  of   indoor/outdoor  portable  playground  items,  school  fair,  etc.)   -   Memberships,  registration  fees,  and  tuition   -   Public  Utility  services   -   Perishable  items  (food,  etc.)  that  are  purchased  in  the  open  market   (TCA  5-­14-­204)   -   Textbooks,  reference  books,  library  books,  educational  films,  manuals,   pamphlets,  workbooks,  periodicals  and  instruction  guides,  any  of  the   preceding  in  either  physical  or  digital  form   -   Professional  services  provided  by  individuals,  such  as  doctors,   lawyers,  architects,  engineers,  educational  consultants,  etc.  (see  TCA   12-­3-­1209)   -   Works  of  art   •   Emergency  Purchases   The  Director  of  Schools,  the  appropriate  MNPS  Executive  Staff  Member,  the   MNPS  Director  of  Facility  and  Grounds  Maintenance,  the  MNPS  Director  of   Business  Services,  and  the  MNPS  Director  of  Purchasing  may  make  or   authorize  others  to  make  emergency  procurements  when  necessary  to  (1)   4       Purchasing  Policy   FM  2.111         avert  hazards  that  threaten  health  or  safety,  (2)  protect  property  from   damage,  or  (3)  avoid  disruptions  in  MNPS  operations,  provided  that   emergency  procurements  be  made  with  such  competition  as  is  practical   under  the  circumstances.   Emergency  procurements  must  conform  to  competitive  quoting/bidding   requirements.  However,  it  is  expected  that  the  quote/bid  process  will  be   modified  depending  upon  the  emergency.  A  written  determination  of  the  basis   for  the  emergency,  and  for  the  selection  of  the  vendor,  shall  be  included  in   the  purchase  file.   If  the  procurement  exceeds  budget  authorization,  the  official  making  the   emergency  determination  shall  notify  the  MNPS  Chief  Financial  Officer  and   the  Board  of  Education.     Purchase  Requisitions   See  FMp  2.141  Electronic  Procurement  Procedures   NOTE:  Beginning  with  the  2008-­09  school  year,  schools  may  not  initiate  purchases   that  have  not  been  included  in  their  School  Improvement  Plan  (SIP)  and  approved  by   the  Executive  Director  of  Federal  Programs  and  Grants,  if  the  expenditure  is  from   federal  funds.     Orders  by  Purchasing  Card   A  Purchasing  Card  may  be  used  for  travel  purchases,  purchases  from  vendors  who   will  not  accept  a  district  purchase  order,  or  in  emergency  situations  where  the  delay   from  processing  a  district  purchase  order  would  jeopardize  normal  operations  or   personnel  safety.  See  FM  2.112  Purchasing  Card  Program.   NOTE:  Use  of  purchasing  cards  for  items  that  are  paid  for  by  federal  funds  is  not   allowed,  except  for  travel  expenses,  in  which  case  the  expenditures  must  be  obligated   by  the  MNPS  Travel  Agent,  using  the  Purchasing  Card  held  by  MNPS  Purchasing.     Issuance  of  Purchase  Orders   The  MNPS  Purchasing  Department  may  issue  a  purchase  order  to  a  vendor  upon   receipt  of  a  properly  submitted  and  authorized  requisition.  A  purchase  order  is  a   formal  commitment  by  MNPS  to  pay  the  stated  amount  if  the  vendor  provides  the   goods  and/or  services  specified  in  the  purchase  order.  A  written  contract  must  be  in   place  for  any  purchase  exceeding  $25,000.     Protest  or  Dispute  of  Purchase   Protests  or  disputes  initiated  by  a  third  party  are  subject  to  the  process  specified  in   FMp  2.140  Protest  Procedure.     Purchasing  Records   5       Purchasing  Policy   FM  2.111         Schools  and  departments  must  maintain  records  at  their  locations  to  support  all   purchasing  transactions  (e.g.  requisitions,  quotes,  receipts,  etc.).    The  records  must   provide  details  of  the  history  of  the  purchase  including,  but  not  limited  to,  the  rationale   for  the  method  of  procurement,  vendor  selection  or  rejection,  and  the  basis  for  the   price.    Such  records  include,  but  are  not  necessarily  limited  to,  requisitions,   purchasing  card  statements  with  receipts,  purchase  orders,  invoices,  sole  source   authorizations,  quotations,  and  receipts.  All  of  these  documents  are  subject  to  audit   and  must  be  kept  on  file  for  a  minimum  of  5  years.     Insurance  Requirements   All  purchasing  transactions  are  subject  to  insurance  requirements  established  by  the   Metro  Director  of  Insurance.     References/Authority   FM  2.113  Contract  Policy   FMp  2.129  Contracts  Procedure   FMp  2.140  Protest  Procedure   FM  2.107   Student  Fundraising  Policy   T.C.A.  5-­14-­204   T.C.A.   49-­2-­1-­106   T.C.A.   6-­36-­115   T.C.A.   12-­4-­106   T.C.A.  12-­3-­1209   T.C.A.   49-­2-­203  (a)   (3)  (A)  (B)   20   U.S.C.   3474   2  CFR  Part  200   6       Purchasing Card Program FM 2.112 ______________________________________________________________________ Purchasing Card Program Purchasing Cards are VISA credit cards issued through the Metropolitan Nashville Public Schools (MNPS) to authorized MNPS employees. Purchasing Cards may be used only under the conditions described below for approved commodities and services for use by MNPS. Obtaining a Card • • • • • Revision History May 2014 March 2012 May 2007 July 2005 Review Department Heads may request that any of their employees be Annually issued a VISA card by completing the attached Purchasing Card Application. Date Last Reviewed The standard limits are $1,000 per transaction and $3,000 per May 2014 month. Department Heads may request higher limits for unusual circumstances. Before being issued a card, employees must attend a Purchasing Card Class instructed by the Purchasing Department and complete the issuing Bank’s card application form (available from Purchasing). Classes will be scheduled on request After submitting the Purchasing Card Application and attending the Purchasing Card Class, Purchasing will order the card from JP Morgan Chase Bank, the servicing bank. It is usually issued and available in Purchasing within five business days. When a card is ready, Purchasing will notify the Cardholder, who must collect the card in person. The cardholder must sign acknowledging receipt. Card Use • • • Shall be used for MNPS authorized purposes only, not for any personal transactions. Only the employee whose name is embossed on the card may use it. No other person is authorized to use it. Except as otherwise defined in this policy, the card may be used for emergency purchases only when the delay caused by submitting the purchase through the Procure-to-Pay System (one day) would create a risk to health, safety, property or critical operations. 1 Purchasing Card Program FM 2.112 • • • • • • • • Purchases shall be within the credit limits approved for each card. The card may be used for over-the-counter, telephone and Internet transactions. When used for telephone and Internet transactions, cardholders need to be cautious to use reputable vendors. When making a purchase by telephone, the cardholder must confirm that the vendor will charge the card when shipment is made so that receipt of the supplies may be certified on the monthly statement. Purchasing cards shall not be used for : - Cash advances - Gift Cards - Vehicle fuel and lubricants (fuel cards shall be used for MNPS vehicles) - Alcoholic beverages - Items for resale such as in school stores (These are items for which sales tax must be paid.)Entertainment - Travel-related items (airline tickets, hotels, rental cars, parking lots, etc.). Exceptions for travel-related items must be approved by the Director of Purchasing in advance. Cards will be blocked for the items above. MNPS receives tax-free status on its purchases except those items bought for resale, as in a school store. Accordingly, the card is prominently embossed with the words “Tax Exempt.” Cardholders must be certain they are not charged tax on their purchases. If payment of tax is not discovered until after the cardholder leaves the store, he/she must contact the vendor and obtain a credit for the tax paid. Taxable transactions can be flagged in Payment Net and will not be approved The Director of Purchasing shall authorize one person in the Purchasing Department to use a Purchasing Card for purchases from vendors who will not accept a purchase order, and for which there is not a cost equivalent (or better) vendor available who will accept purchase orders. Any such purchase must have the prior approval of the Director of Purchasing. Administration The Department Head shall appoint an employee (and a trained back-up) within the department who shall be responsible for training cardholders in the use of the on-line reconciliation process, assisting cardholders in the use and administration of their cards and overseeing the general administration of the card program. Reconciliation • The cardholder is responsible for reviewing each transaction on-line at the Bank website to ensure its validity and accuracy. If the cardholder finds an inaccuracy, he or she is responsible for initiating the on-line dispute procedure. This review shall be done as soon as possible following the posting of the transaction on the Bank’s website. 2 Purchasing Card Program FM 2.112 • Detailed instructions for reconciling and processing the monthly card statement issued by the Bank are included in MNPS Procedure FMp 2.144 (Purchasing Card Program). Lost or Stolen Cards The cardholder must immediately notify the JPMorgan Chase Bank by telephone at the toll free customer service number (1-800-270-7760) in the event that a card is stolen. The cardholder must also immediately notify the MNPS Purchasing Department by telephone and email, describing the details of the loss or theft. The cardholder will assist the Bank as needed to minimize the liability to MNPS. Request for Changes • • • Department Heads may request changes to cardholder names (caused by marriage, divorce, etc.), changes in credit limits, etc. by emailing the request to the Purchasing Department. If a cardholder is terminated by MNPS, or transferred from one department to another, the transferring Department Head must notify the Purchasing Department by email of the transfer. The Department Head shall collect the card, cut it in half and sent the pieces by secure means of delivery to Purchasing. If a cardholder needs to take leave for medical or personal reasons in excess of one month, the Department Head shall notify the Purchasing Department by email. The cardholder’s credit limits will be reduced to $1.00 for security reasons until the Department Head notifies Purchasing by email that the cardholder has returned to work. Annual Inventory Annually, the Purchasing Department shall provide to each department a list of Purchasing Cards issued to its employees. The Department Head must conduct a physical inventory of all purchasing cards and provide a list of cards that cannot be found to the Purchasing Department by email. References and Authority: FM 2.111Purchasing for MNPS FMp Purchasing Card Program 3 Contracts  Policy   FM  2.113                           ______________________________________________________________________      DEFINITION     A  contract  is  a  voluntary,  deliberate,  and  legally  enforceable  (binding)   agreement  with  specific  terms  between  two  or  more  persons  or  entities  in   which  there  is  a  promise  to  do  something  in  return  for  a  valuable  benefit   known  as  consideration.  Consideration,  as  it  is  used  in  defining  a  contract,   does  not  have  to  be  financial  (payment  of  money).   Whether  a  document  is  called  an  agreement,  contract,  memorandum  of   agreement  or  memorandum  of  understanding,  it  is  subject  to  the   requirements  of  this  policy.   All  Metro  Nashville  Public  Schools  contracts  must  be  in  writing.     AUTHORITY     Revision  History   November  2016   May  2014   May  2011   November  2009   January  2004       Review   Annually     Date  Last   Reviewed     November  2016     In  general,  the  Metropolitan  Board  of  Public  Education  (MBPE)  is  the  final   approving  authority  for  any  contract  which  is  prepared  consistent  with  this   guideline.   Any  MBPE  contract  that,  initially  or  by  later  Amendment,  exceeds  $100,000   in  award  value  must  be  approved  by  the  Board  of  Education.  At  its   discretion,  the  district  may  submit  any  other  contracts,  regardless  of  award  value,  to  the   Board  for  approval.  Any  Amendment  to  an  existing  Board-­approved  MBPE  contract  that   increases  its  award  value,  or  any  Amendment  to  a  not  previously  Board-­approved   MBPE  contract  that  increases  the  contract  value  to  greater  than  $100,000,  must   be  approved  by  the  Board.   The  responsibility  for  all  contract  negotiations  and  administration  of  contract  policies  and   procedures  has  been  centralized  and  delegated  to  the  Director  of  Purchasing.   The  MNPS  Purchasing  Department  shall  be  responsible  for  the  preparation,  issuance,   and  administration  of  all  MNPS  publicly  posted  solicitations    and  contracts,  and   documentation  of  the  same.   No  individual  has  the  authority  to  enter  into  purchase  contracts  in  any  way  unless   specifically  authorized  to  do  so  by  the  Director  of  Schools,  the  Chief  Financial  Officer  or   the  Director  of  Purchasing.       1   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113       GENERAL   The  process  to  award  a  Board  of  Education  Contract  will  be  initiated  when   any  of  the  following  conditions  exist:     •   Repetitive  cumulative  purchases  of  a  good  or  service,  or  from  a   particular  vendor,  are  expected  to  exceed  $25,000  during  the  year.   •   There  is  a  desire  or  need  to  secure  an  assurance  of  supply  and/or   service  and/or  pricing  for  an  extended  period  of  time.   •   There  is  a  desire  or  need  to  have  the  protections  for  liability,  indemnity,   warranty,  infringement,  etc.  that  MNPS  standard  contract  terms   provide.   •   When  it  is  otherwise  judged  to  be  in  the  best  interest  of  the  Board  of   Education  (MBPE)  and  Metropolitan  Nashville  Public  Schools  (MNPS).     Amendments  to  existing  contracts  shall  clearly  state  the  additions,  deletions   and  modifications  to  the  contract,  including  a  statement  as  to  whether  the  new   terms  replace  or  are  in  addition  to  terms  expressed  in  the  original  contract.     All  contracts  (or  contract  requests)  shall  be  submitted  to  the  Purchasing   Department  prior  to  the  beginning  of  the  contract's  original  term  or  renewal  date,   with  adequate  lead  time  to  fully  prepare,  negotiate,  and  execute  the  contract   prior  the  contract’s  effective  date.   Budget  appropriation  shall  be  established  before  a  contract  is  executed.       COMPETITION  REQUIREMENTS  FOR   CONTRACTS   All  contracts  for  which  purchases  during  the  contract  term  are  expected  to   exceed  $25,000,  unless  a  noncompetitive  award  has  been  expressly   authorized  by  the  Director  of  Purchasing,  shall  be  awarded  using  competitive   sealed  bids  (Invitations  to  Bid  or  ITBs)  or  competitive  sealed  proposals   (Requests  for  Proposals  or  RFPs).         CONTRACTS  NOT  REQUIRING  COMPETITION   Goods  and/or  services  exempt  from  competition  for  contract  award  are  those   that  are  available  from  only  one  vendor  (sole  source),  those  for  which  a  single   vendor  is  directed  as  a  condition  of  receiving  funding  for  the  purchase,  those   needed  on  a  temporary  emergency  basis,  or  those  specifically  exempted  by   law,  statute,  ordinance  or  MNPS  Purchasing  Policy  FM  2.111.   2   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113             The  requesting  school/department  will  complete  and    submit  to  Purchasing   the  Sole  Source  Justification  form,  when  appropriate,  prior  to  submitting  a   contract  or  contract  request  to  Purchasing  for  execution.  For  more  information   see  FM  2.111  Purchasing  Policy.   TYPES   OF   CONTRACTS   The  following  types  of  contracts  are  established  and  administered  by  MNPS:     •   Purchase  of  Services  (including  consulting  and  professional   development  services)         •   Memorandum  of  Understanding  (MOU)  -­  an  agreement  between   MNPS  and  another  Metropolitan  Nashville  agency  stipulating  that  one   will  provide  a  service  and  the  other  will  compensate  for  the  service,  or   that  the  service  will  be  provided  at  no  cost.   •   Purchase  of  Goods   •   Purchase  of  Goods  and  Services   •   Lease  of  property  or  goods   •   Affiliation  Contracts  –  established  between  MNPS  and  secondary   education  institutions  for  the  purpose  of  proving  students  at  the   Institution  with  clinical  field  experience  or  student  teaching  experience.   These  contracts  generally  have  no  compensation  associated  with   them.   •   Data  Use  &  Integration  Security  Agreement     CODE   OF   CONDUCT   FOR   AWARDING  CONTRACTS   No  employee,  officer  or  agent  of  MNPS  shall  participate  in  the  process  for   awarding  a  contract  if  a  conflict  of  interest,  real  or  apparent,  would  be   involved.  For  information  regarding  what  constitutes  a  conflict  of  interest,  and   what  actions  are  to  be  taken  in  such  case,  see  HR  5.110  Ethics,  Conflicts  of   Interest,  and  Acceptance  of  Gifts.     All  employees,  officers,  or  agents  of  MNPS  involved  in  an  award  of  a  contract   shall  file  a  Conflict  of  Interest  statement  noting  apparent  or  real  conflict  of   interest.  The  Conflict  of  Interest  statement  shall  be  effective  for  one  year  after   signing.     For  any  contract  supported  with  federal  funds,  any  potential  conflict  of  interest   must  be  disclosed  in  writing  to  the  awarding  agency.   3   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113         SPECIFIC  REQUIREMENTS  FOR   FEDERALLY   FUNDED   CONTRACTS   For  any  MBPE  contracts  that  are  funded  by  federal  grants,  the  following   special  requirements  shall  apply.   1.   All  contracts  whose  funding  source  is  from  Federal,  State  or  other   Grants,  must  be  approved  by  the  Executive  Director  of  Federal   Programs.   2.   The  contract  shall  contain  any  necessary  clauses  identified  in  Appendix  II   of  the  Uniform  Administrative  Requirements,  Cost  Principles,  and  Audit   Requirements  for  Federal  Awards,  or  by  the  awarding  agency.     3.   The  contract  shall  contain  language  approved  by  the  MNPS  Grant   Manager  that  defines  the  specific  funding  source.   4.   The  MNPS  Grant  Manager  will  be  named  in  the  contract  terms  as  the   MNPS  person  responsible  for  financial  oversight  of  the  contract  (person   who  receives  and  approves  all  invoices)   5.   At  the  time  of  receiving  a  contract  request  (or  request  for  RFP/ITB  that  is   expected  to  result  in  a  contract),  Purchasing  will  notify  the  Federal   Programs  Department.  Proceeding  with  contract  initiation  shall  be   dependent  upon  preapproval  by  the  MNPS  Grant  Manager  for  grant   funding  availability  and  funding  allocation  to  the  specific  contract  purpose.               CONTRACT   APPROVAL  &  SIGNATURE   Signatures  on  MBPE  contracts  will  be  applied  manually,  or  electronically  by   an  e-­signature  service  approved  by  the  MNPS  Director  of  Purchasing  and   the  Metropolitan  Attorney.   Contracts  are  to  be  first  signed  (and  notarized,  if  manually  signed)  by  the   Contractor  before  submitting  them  for  MBPE  and  Metropolitan  Government   signatures.   Contract  execution  will  include  signature  approvals  from  the  following:   •   Contractor   •   MNPS  Executive  Director  of  Federal  Programs  (for  contracts  funded   by  federal  grants)   •   MNPS  Executive  Staff  Member  responsible  for  funding  and/or   oversight  of  the  contract   •   MNPS  Director  of  Purchasing   •   MNPS  Chief  Financial  Officer  (CFO)   4   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113     •   MBPE  Board  Chair   •   Metropolitan  Director  of  Finance   •   Metropolitan  Director  of  Insurance   •   Metropolitan  Attorney   •   Metropolitan  County  Clerk  (signature  &  contract  filing)     See  FMp  2.129  Contracts  Procedure  for  detailed  instructions  on  contract   signature  routing.         COMMENCEMENT  OF  WORK   In  cases  where  a  MNPS  contract  is  required,  the  supply  of  products  and/or   services  under  the  contract  terms  will  not  commence  before  the  contract  is   fully  approved  and  executed.           CONTRACT  CLOSE  OUT   Upon  termination/expiration  of  any  complex  service  contract  with  cumulative   actual  payments  in  excess  of  $100,000,  the  following  documentation  shall  be   collected  and  retained  in  the  official  contract  file  maintained  by  MNPS   Purchasing.   1.   A  report  or  accounting  of  the  actual  payments  made  to  the  vendor  under   the  contract,  if  practicable.  A  reconciliation  of  any  overpayments  or   underpayments  should  be  included.     2.   A  copy  of  the  fully  executed  original  contract,  along  with  original  copies  of   any  fully  executed  amendments  to  the  contract.  This  is  to  include  any   executed  documents  listed  as  attachments,  addendums,  exhibits,  etc.  to   the  contract  or  contract  amendments.   3.   If  applicable,  a  report  listing  any  inventions,  patents,  or  copyrights,  to   which  MNPS  retains  an  interest,  created  during,  and  related  to,   performance  under  the  contract.   4.   If  applicable,  a  complete  inventory  and  reconciliation  of  any  MBPE   equipment  that  the  vendor  had  custody  of  during  the  contract  term.   5.   If  applicable,  documentation  related  to  early  termination  of  the  contract.   6.   A  written  evaluation  of  the  performance  of  the  vendor,  and  the   effectiveness  of  the  services  rendered  under  the  contract.  This  should   include  a  comparison  of  actual  versus  expected  results  from  the  contract   (i.e.  did  we  get  the  benefit  that  we  anticipated).  The  template  for   5   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113     completing  the  performance  evaluation  is  included  at  the  end  of  this   Policy.               REFERENCES/  AUTHORITY   HR  5.110  Ethics,  Conflicts  of  Interest,  and  Acceptance  of  Gifts   FM  2.111  Purchasing  Policy   FMp  2.129  Contracts  Procedure   FMp  2.140  Procedure  for  Protest     TCA  6-­36-­115  Purchases   and  Contracts   TCA  12-­4-­106  Contracts  for  Professional  Services   TCA  49-­2-­206  Executive  Committee  –  Powers  and   Duties   34  CFR   Part   76   34  CFR   Part   80   OMB  Uniform  Guidance:  Cost  Principles,  Audit,  and  Administrative  Requirements  for   Federal  Awards         6   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113     The  following  template  is  to  be  used  to  document  the  performance  of  the  vendor  and   the  effectiveness  of  the  services  provided,  as  required  by  sub-­section  6  of  the   CONTRACT  CLOSE  OUT  section  of  this  Policy.       Post-­Contract  Evaluation     Contractor  name  (vendor):  __________________________________       MBPE  Contract  Number:  _________________       Contract  start  date:  ____________     End  date:  _____________       Contracted  compensation:  $____________   Actual  spend:  $_______________       Description  of  Services:  ______________________________________________       _________________________________________________________________       _________________________________________________________________         Deliverable  #1:  ____________________________________________________       Did  the  Contractor  complete  this  action/event?        Yes  __        No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  desired  outcome  achieved?          Yes  __          No  __     If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  timeline  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  all  required  documentation  provided?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       7   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113     ________________________________________________________________       Was  the  contracted  price  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________           Deliverable  #2:  ___________________________________________________       Did  the  Contractor  complete  this  action/event?        Yes  __        No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________         Was  the  desired  outcome  achieved?          Yes  __          No  __     If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  timeline  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  all  required  documentation  provided?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  contracted  price  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________         Deliverable  #3:  ___________________________________________________       8   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Contracts  Policy   FM  2.113     Did  the  Contractor  complete  this  action/event?        Yes  __        No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  desired  outcome  achieved?          Yes  __          No  __     If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  timeline  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  all  required  documentation  provided?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________       Was  the  contracted  price  met?          Yes  __          No  __       If  no,  explain:  _____________________________________________________       ________________________________________________________________         [add  sections  if  more  than  3  deliverables]       Evaluator         Dept  Head       Contract  Agent       __________________     Signature         __________________   Name           _________________   Date               _________________     Signature       ________________     Signature       _________________   Name         ________________     Name         _____________   Date       _____________     Date       9   Visit  http://policy.mnps.org  for  a  complete  listing  of  MNPS  Policies  and  Procedures.   Initiating Contracts Conflict of Interest Statement FM 2.113a ______________________________________________________________________ MNPS prohibits any employee or officer of MNPS to participate in the selection or award of a contract if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:  The employee or officer,  Any member of his/her immediate family,  His/her partner or an organization which employs or is about to employ, any of the above, has a financial or other interest in the firm selected for the award. No MNPS employee or officer shall solicit or accept gratuities, favors or anything of monetary value from any contractors, subcontractors, potential contractors, or parties to sub agreements. MNPS will not award contracts to independent contractors who have solicited contracts by means of offering gratuities, favors, or anything of monetary value to the MNPS employee responsible for awarding contracts. Revision History November 2009 Review Annually Date Last Reviewed December 2012 The following Conflict of Interest Statement must be signed annually by any MNPS employee responsible for awarding contracts within Metro Nashville Public Schools: Conflict of Interest Statement for Awarding Contracts By signing below, I affirm that I have no conflict of interest, real or apparent, that might affect my objectivity and impartiality in preparing, submitting, approving or administering any non-competed contract or in evaluating, awarding or administering any competitive contract to provide goods and services to Metropolitan Nashville Public Schools. I also affirm that I have neither solicited nor accepted any gratuities, favors or anything of monetary value from contractors, potential contractors or subcontractors who are or may do business with Metropolitan Nashville Public Schools. I also affirm that I have received and read MNPS’ Code of Conduct for Awarding Contracts and agree to abide by the provisions contained therein. ___________________________ Signature _________________ Date ___________________________ Printed Name 1 Contracts Procedure FMp 2.129 Standard  Operating  Procedure  Outline   Category:   Fiscal  Management   Procedure:   Procedures  for  Initiating  Contracts   Policy  Reference  #  :  FM  2.113   Department:   Purchasing   Version:  2.0   Date:  November  22,  2016   Operational  Objective(s)   •   To  detail  the  process  for  contracts  awarded  within  MNPS   Procedure     A.   Selecting  the  Contractor   1.   For  contracts  of  less  than  $25,000,  Contractor  selection  is  subject  to  the  same  rules  for  competitive   award  as  purchase  orders  (see  FM  2.111  Purchasing  Policy).   2.   If  the  contracted  value  is  projected  to  exceed  $25,000,  and  the  goods/services  to  be  contracted  are   not  exempt  from  competitive  award  by  federal  law,  Tennessee  statute,  Metro  ordinance,  or  MNPS  policy,   the  requirements  m ust  be  publicly  posted  for  competitive  selection,  either  by  Invitation  to  Bid  (ITB)  or   Request  for  Proposals  (RFP),  and  contract  award.  The  MNPS  Director  of  Purchasing  m ust  expressly   approve  any  requests  for  sole  source  or  emergency  contracts.   3.   Invitation  to  Bid  (ITB)  Procedure   i.   ii.   iii.   iv.   v.   vi.   vii.   viii.   ix.   x.   The  MNPS  Contract  Agent  prepares  the  ITB  using  the  standard  template  for  ITB  maintained  by   MNPS  Purchasing.   The  solicitation  is  for  sealed  Bids  and  is  generally  for  price  only,  with  the  Bid  conditions   and  item  specifications  stated  clearly  and  in  sufficient  detail  as  to  avoid  receiving  bids  for   non-­equivalent  items  or  non-­compliant  conditions.   Item  specifications  in  the  ITB  are  to  be  generic  in  nature  (if  possible),  and  are  not  to  be  so   constructed  as  to  unnecessarily  restrict  competition.   The  ITB  is  to  be  posted  on  the  MNPS  website  for  a  reasonably  sufficient  period  of  time  for   prospective  bidders  to  evaluate  and  respond.  The  Contract  Agent  will  also  send  notification  of   the  posting  to  all  vendors  who  have  commodity  code(s)  in  their  vendor  registration  profile  that   are  relevant  to  the  ITB.  If  time  permits,  the  Contract  Agent  will  identify  additional  non-­ registered  potential  bidders  to  include  in  the  solicitation.     In  cases  where  visual  examination  of  the  location  where  an  item  will  be  utilized  is  needed  in   order  to  make  a  correct  bid,  sufficient  time  should  be  allotted  for  prospective  bidders  to   conduct  a  site  visit/examination.   At  the  deadline  time/date  for  submission  of  Bids,  the  Contract  Agent  show  and  read  aloud   all  Bids  received.   The  low  bidder  with  a  responsive  and  responsible  bid  is  to  be  selected  as  the  awardee.  If  so   stated  in  the  ITB  terms,  the  Contract  Agent  may  make  award(s)  on  an  item-­by-­item  basis,   thereby  awarding  each  item  of  the  ITB  to  that  item’s  low  bidder.  Any  exception  to  the  low  bidder   award  must  be  approved  by  the  Director  of  Purchasing.   If  only  one  bid  is  received,  an  award  may  be  made  to  the  single  bidder  if  the  Contract  Agent   determines  that  the  bid  submitted  is  fair  and  reasonable.   In  the  case  of  a  tie  low-­bid,  the  Contract  Agent  may  make  the  award  in  any  fair  and  impartial   way  that  will  discourage  tie  bids.   Publish  Bid  Summary.   Page 1 Contracts Procedure FMp 2.129 4.   Request  for  Proposal  (RFP)  Procedure   i.   ii.   iii.   iv.   v.   vi.   vii.   viii.   ix.   x.   xi.   xii.   xiii.   xiv.   The  MNPS  Contract  Agent  prepares  the  RFP  using  the  standard  template  for  RFP  maintained   by  MNPS  Purchasing.  This  is  accomplished  with  collaboration  and  assistance  from  the   requesting  school/department,  particularly  with  regards  to  the  RFP  Scope,  Functional   Requirements,  and  Evaluation  Criteria.   The  evaluation  criteria  for  the  RFP  will  include  multiple  criteria,  including  price.  Usually,  a   combination  of  objective  and  subjective  criteria  is  used,  with  the  proportionate  weight  that  each   criterion  will  receive  in  the  evaluation  stated  in  the  RFP.  It  is  recommended  that  the  RFP   instructions  require  Proposers  to  submit  the  pricing  portion  of  their  Proposal  in  a  sealed  envelope   separate  from  the  rest  of  their  Proposal;;  the  evaluation  of  Proposals  can  then  be  conducted   without  bias  introduced  by  any  foreknowledge  of  pricing.   If  the  RFP  is  to  be  federally  funded  and  the  value  of  award  is  expected  to  exceed  $150,000,  the   Contract  Agent  is  to  perform  a  cost  or  price  analysis  prior  to  publicly  posting  the  RFP.   The  RFP  is  to  be  posted  on  the  MNPS  website  for  a  reasonably  sufficient  period  of  time  for   prospective  proposers  to  evaluate  and  respond.  The  Contract  Agent  is  to  send  notification  of  the   posting  to  all  vendors  who  have  commodity  code(s)  in  their  vendor  registration  profile  that  are   relevant  to  the  RFP.  If  time  permits,  the  Contract  Agent  will  identify  additional  non-­registered   potential  proposers  to  include  in  the  solicitation.   At  the  deadline  time  for  submitting  proposals,  or  as  soon  thereafter  as  reasonably  possible,  the   Contract  Agent  shall  open  all  Proposals,  but  only  to  the  extent  necessary  to  identify  the  proposer.   Only  the  name  of  the  proposers  will  be  publicly  disclosed  until  after  confirmation  and  approval  of   awards.   The  Contract  Agent  will  examine  each  Proposal  to  determine  if  it  is  responsive  and  responsible.   Only  Proposals  that  are  both  responsive  and  responsible  will  be  submitted  for  competitive   evaluation.     A  Proposal  Evaluation  Committee  of  not  less  than  3  members  is  to  be  appointed  by  the  Contract   Agent,  in  collaboration  with  the  requesting  school/department.  Membership  of  the  Committee  may   consist  of  both  MNPS  employees  and  non-­MNPS  personnel.    The  objective  is  to  have  sufficient   unbiased  expertise  within  the  Committee  to  result  in  an  award  recommendation  that  provides  the   best  value  to  MNPS.   Each  member  of  the  Committee  m ust  sign  the  MNPS  Conflict  of  Interest  Form,  or  have  a  Form  on   file  signed  within  the  previous  12  months  (see  HR  5.110  Ethics,  Conflicts  of  Interest,  and   Acceptance  of  Gifts).   Members  of  the  Committee  may  not  be  in  a  supervisory/subordinate  role  with  any  other  member  of   the  Committee.   Evaluations  and  award  recommendations  shall  be  by  Committee  consensus.  Any  alternative   method  must  be  pre-­approved  by  the  Director  of  Purchasing.  T he  Contract  Agent  will  act  as   facilitator  for  the  evaluation  process  and  may  not  participate  as  a  member  of  the  Evaluation   Committee.   If  appropriate,  after  initial  evaluation  is  completed,  2  or  more  of  the  proposers  may  be  selected  as   finalists  for  consideration.  Interviews  with,  and/or  presentations  from,  the  finalists  may  be  used  to   make  final  award  recommendation(s).   The  Contract  Agent  may  elect  to  solicit  a  “best  and  final  offer”  if  it  is  in  the  best  interest  of  MNPS.   A  “best  and  final  offer”  may  only  be  solicited  once  for  a  RFP,  and  the  solicitation  must  be   extended  to  all  original  proposers.   The  Committee  m ay  submit  a  recommendation  for  single  or  multiple  awards.  In  either  case,   recommended  awardees  must  be  those  who  received  the  highest  overall  consensus  score/rank,   based  solely  on  the  evaluation  criteria  specified  in  the  RFP.   The  Committee’s  award  recommendation(s)  m ust  be  approved  by  the  Director  of  Purchasing   before  contracts  are  executed.  If  an  award  exceeds  $100,000,  it  must  also  be  approved  by  The   Page 2 Contracts Procedure FMp 2.129 Metropolitan  Board  of  Education.   5.   In  the  case  of  either  an  ITB  or  a  RFP,  the  posted  instructions  should  include  allowance  for  interested   parties  to  submit  questions  for  clarification  of  the  posted  specifications  or  terms.  A  deadline  should   be  set  for  submitting  such  questions,  as  well  as  a  prompt  deadline  for  posting  the  response  to   questions.  Using  this  procedure  step,  all  submitted  questions  must  be  answered  in  the  posting.   B.     Protest  of  Awarded  Contracts  (see  FMp  2.140  Procedure  for  Protest  of  Contract  Award)   C.      Preparing  the  Contract     1.   The  Contract  Agent  will  prepare  the  contract  using  the  appropriate  MBPE  contract  template,   maintained  by  MNPS  Purchasing  and  pre-­approved  by  the  Metropolitan  Attorney,  based  on  the  type   of  goods  and/or  services  required.  In  the  case  of  an  award  from  an  ITB,  the  ITB  itself  (signed  and   notarized  by  the  Bidder)  becomes  the  contract  document.     2.   A  unique  contract  number  will  be  assigned  and  applied  to  the  contract  and  all  of  its  amendments,   attachments,  addendums,  exhibits,  etc.     3.   The  contract  will  contain  the  Contractor’s  legal  name,  address,  and  contact  information,  a  description  of  the   goods  and/or  services  to  be  provided,  the  terms  of  compensation,  the  contract  beginning  and  ending   dates  (Term),  the  Contractor  performance  evaluation  criteria,  and  such  other  standard  and  special  terms   as  are  appropriate  for  the  specific  contract.     4.   Generally,  every  MBPE  contract  must  contain  the  following  provisions.  Any  alteration  or  elimination  of   any  of  these  terms  must  be  approved  by  the  Metropolitan  Attorney  assigned  to  MNPS.   i.   ii.   iii.   iv.   v.   vi.   vii.   viii.   ix.   x.   xi.   xii.   xiii.   Payments   a.   All  contracts  for  services  to  MNPS  shall  require  that  progress  reports,  detailing  the  work   performance,  vendor    employees  performing  the  work,  dates,  times,  attendance  rosters  for   MNPS  employees  involved,  etc.(as  applicable),  to    be  submitted  with  each  invoice.   b.   Travel  reimbursements  provided  by  a  contract  shall  be  subject  to  the  limits  and  rules  set   forth  in  FM  2.102  Travel  Policy.   c.   The  contract  must  state  a  maximum  total  compensation  amount  that  is  not  to  be  exceeded   during  the  term  of  the  contract.   All  contracts  will  contain  provisions  to  terminate  the  contract  on  the  grounds  of  (a)  breach  by  the   Contractor,  (b)  discontinuation  of  funding  for  the  contract,  or  (c)  convenience  of  MNPS.   Force  Majeure.   Any  modification  of  the  contract  must  be  executed  by  a  written  amendment  signed  by  the   contract  signatories.   MNPS  is  not  liable  for  any  delivery  of  goods  or  services  under  the  contract  unless  pre-­authorized   by  a  MNPS  purchase  order.   Contractor’s  Warranty  obligations  for  goods  or  services  provided  under  the  contract.   Contractor’s  grant  of  license  for  MNPS  to  use  any  software  provided  under  the  contract.   Contractor’s  liability  to  defend  MNPS  in  the  case  of  any  Copyright,  Trademark,  Service  Mark,  or   Patent  Infringement  by  Contractor’s  products  or  services.   Preservation  and  return  of  any  MNPS  property  provided  to  Contractor  under  the  contract,  and   MNPS’  ownership  rights  for  any  products  produced  under  the  contract.   No  implication  by  the  contract  of  a  Partnership  or  Joint  Venture  relationship  between  MNPS  and   the  Contractor.   MNPS’  agreement  required  before  any  Assignment  of  the  contract.   School  District  Statutory  Immunity   No  taxes  to  be  charged  to  MNPS  or  included  in  the  contract  pricing.   Page 3 Contracts Procedure FMp 2.129 xiv.   Contractor’s  Indemnification  of  MNPS  and  MNPS’  disclaimer  of  Indemnification  under  state   statute.   xv.   Contractor’s  liability  for  MNPS’  attorney  fees  in  the  case  of  legal  action  where  MNPS  prevails.   xvi.   No  contingent  fees.   xvii.   No  Gratuities  and  Kickbacks.   xviii.   Confidentiality  of  Student  records.   xix.   Requirement  for  non-­discrimination  in  the  Contractor’s  employment  practices.   xx.   Requirement  for  compliance  with  the  Americans  with  Disabilities  Act   xxi.   Requirement  for  the  Contractor  to  retain  records  related  to  the  contract  for  a  period  of  five  years   from  the  date  of  the  final  payment,  and  make  them  available  for  audit  by  MNPS,  the  Metro   Nashville  government,  the  state  and  federal  government,  or  the  designees  of  the  foregoing.   xxii.   Governing  Law  shall  be  the  state  of  Tennessee,  with  Davidson  County  as  the  venue  for  legal   filings.   xxiii.   Requirement  for  Contractor  to  comply  with  TCA  49-­5-­413  Criminal  Background  Checks,  prior  to   permitting  an  employee  to  have  contact  with  students  or  enter  school  grounds  when  students   are  present.   xxiv.   Requirement  for  a  certificate  of  insurance,  with  coverage  types  and  limits  as  specified  by  the   Metropolitan  Director  of  Insurance.  The  certificate  must  list  MNPS  or  MBPE  as  the  Certificate   Holder  and  designate  the  same  as  an  additional  insured  under  the  general  liability  policy.   5.   The  following  provisions  shall  not  be  included  in  any  contracts,  unless  approved  by  the  Metropolitan   Attorney  assigned  to  MNPS.   i.   Provisions  that  require  MNPS  to  pay  taxes,  late  payment  penalties  or  interest,  finance  charges,   cancellation  fees,  liquidated  damages,  incidental  or  consequential  damages,  or  punitive  or   exemplary  damages.   ii.   Provisions  requiring  MNPS  to  make  deposits  or  payments  before  goods  are  received  or  services   are  performed.  Possible  exceptions  may  be  for  subscriptions,  computer  software,  computer   software/hardware  maintenance,  leases,  and  other  similar  services.   iii.   Provisions  requiring  MNPS  to  purchase  or  obtain  liability,  property,  or  other  insurance,  or  a   performance  bond.    In  certain  cases  (e.g.  property  insurance  to  cover  leased  items),  it  may  be   reasonable  for  MNPS  to  obtain  insurance.  In  such  cases,  the  Metropolitan  Director  of  Insurance   is  to  be  consulted.   iv.   Provisions  requiring  MNPS  to  insure,  guarantee,  indemnify,  or  hold  harmless  any  party  from   claims  which  may  arise  out  of  the  contract.   v.   Provisions  requiring  MNPS  to  consent  to  binding  arbitration  by  a  third  party  for  claims.   vi.   Any  disclaimer  by  the  Contractor  of  liability  for  incidental,  special,  exemplary,  or  consequential   damages.   vii.   Any  disclaimer  by  the  Contractor  of  express  or  implied  warranties  of  merchantability  and  fitness   for  a  particular  purpose.   viii.   Any  limitation  of  liability  that  the  Contractor  may  be  subject  to.   ix.   Delivery  terms  that  pass  the  risk  of  loss,  or  title,  to  MNPS  before  delivery  and/or  installation  of   products,  unless  the  Contractor  or  MNPS  provides  shipment  protection  in  MNPS’  interest.   x.   Right  of  the  Contractor  to  enter  MNPS  premises  without  notice  to  remove  equipment  or  product   upon  alleged  default  by  MNPS.   xi.   Terms  that  award  attorneys'  fees  or  costs  to  the  Contractor  in  the  event  of  legal  action  against   MNPS.   xii.   Any  limitation  on  time  within  which  the  District  may  bring  suit.   xiii.   Any  provisions  requiring  confidentiality  or  nondisclosure  that  violate  the  Tennessee  Open   Records  Act.   6.   Contractors  may  insist  on  using  their  own  contract  format.  In  these  cases,  with  assistance  and  approval   Page 4 Contracts Procedure FMp 2.129 from  the  Metropolitan  Attorney  assigned  to  MNPS,  the  Contractor’s  form  may  be  used  if  modified  so  as   to  include  the  required  MBPE  standard  terms  and  exclude  any  disallowed  terms  (see  FM  2.113   Contracts),  and  then  executed  as  a  MBPE  contract.   7.   If  any  portion  of  the  contract  funding  is  to  be  from  Federal  funding  sources,  an  approved  and  signed   Federal  Funds  Spending  Plan  must  be  completed  by  the  contract  requestor,  and  a  copy  should  be  kept   with  the  contract  documentation.   8.   All  contracts  that  will  exceed  $100,000  in  total  compensation,  and  any  contract  Amendments  that   individually  or  cumulatively  increase  the  total  compensation  of  the  contract  above  $100,000,  must  be   approved  by  the  Board  of  Education  at  a  scheduled  business  meeting.  Any  amendment  that  increases  the   total  compensation  of  a  Board-­approved  contract  must  also  be  approved  by  the  Board.  All  Grant  contracts  m ust   be  approved  by  the  Board  of  Education.  All  contracts  to  be  presented  to  the  Board  of  Education  for   approval  are  first  to  be  approved  by  the  MNPS  Senior  Leadership  Team.   9.   Obtain  from  the  contractor  a  Certificate  of  Insurance  (COI)  meeting  the  insurance  requirements  stated  in   the  contract  template.  In  the  case  of  Grant  Contracts,  the  grantor  is  not  required  to  supply  a  COI.  Address   any  questions  regarding  a  specific  contract’s  insurance  coverage  to  the  Metropolitan  Director  of  Insurance.   10.   Prepare  the  Contract  Financial  Summary  Sheet  (maintained  by  the  Purchasing  Department)  to   accompany  the  final  contract  draft  and  COI  for  signatures.   D.     Contract  Execution  (signing)   1.   The  following  documents  (as  applicable)  are  to  be  assembled  by  the  Contract  Agent  and  collectively   submitted  with  the  contract  for  contract  signing.   i.   ii.   iii.   Financial  Summary  sheet  (maintained  by  MNPS  Purchasing)   Certificate  of  Insurance   RFP  or  ITB  from  which  the  contract  is  awarded,  including  all  Amendments  and  Attachment   issued  to  the  RFP/ITB   iv.   Contractor’s  Proposal/Bid  submitted  in  response  to  the  RFP/ITB,  including  any  supplemental   submissions  that  were  requested  by  MNPS   v.   All  Attachments,  Addendums,  Exhibits,  etc.  that  are  incorporated  into  the  contract  by  reference   2.   The  contract  is  sent  to  the  Contractor  for  signature  before  routing  for  MNPS  and  Metropolitan  Government   signatures.  In  some  cases  (Grant  Contracts,  Facilities  Use  Contracts,  etc.),  the  Contractor  m ay  insist  that   the  MNPS  Board  sign  the  contract  before  the  Contractor.  If  that  cannot  be  avoided,  proceed  with  obtaining   MNPS  signatures  (through  the  Board  Chair)  and  then  send  the  contract  to  the  Contractor  for  signature,   after  which  the  original  contract  must  be  returned  to  MNPS  to  complete  the  signature  routing  through  the   Metropolitan  Government  and  filing  by  the  Metropolitan  Clerk.         3.   Contract  execution  requires  the  following  signatures  (or  initials,  as  indicated  below)  on  the  contract,   applied  either  manually  or  electronically.   i.   ii.   Contractor   For  MNPS  &  MBPE:   a.   Principal/Department  Head  requesting  the  contract  (signature  or  initials)   b.   Director  of  Purchasing   c.   Federal  Programs  Financial  Analyst  –  initials  only  (if  the  contract  will  expend  federal  funds)   d.   Executive  Director  of  Federal  Programs  (if  the  contract  will  expend  federal  funds)   e.   Staff  Officer  who  will  have  primary  operational  oversight  of  the  Contractor     f.   Director  of  Budgeting  and  Accounting  (initials  only)   g.   Chief  Financial  Officer     h.   MBPE  Chair   iii.   For  the  Metropolitan  Government:   Page 5 Contracts Procedure FMp 2.129 a.   OMB  Clerk  –  initials  only   b.   OMB  Supervisor  –  initials  only   c.   Director  of  Finance     d.   Director  of  Insurance   e.   Attorney     f.   Metropolitan  Clerk  (signs  and  files  the  completed  contract)   1.   When  all  required  signatures  are  obtained,  the  Metropolitan  Clerk  signs  and  date  stamps  the  contract,   which  is  then  considered  executed  and  in  force.  A  scanned  copy  of  the  executed  contract  is  filed  by  the   Metropolitan  Clerk  and  sent  to  MNPS  Purchasing.   2.   Upon  filing,  the  MNPS  Contract  Agent  responsible  for  the  contract  will  send  a  copy  of  the  fully  executed   contract  to  the  contract  requestor  and  the  Contractor.     Performance  Measure/Accountability   •   Continuous  evaluation  of  procedure  to  ensure  efficiency  and  compliance  with  all  regulations   Page 6 Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 ______________________________________________________________________ All Metropolitan Nashville Public Schools (MNPS) employees are required to abide by all federal, state and local government laws. MNPS employees must also maintain the highest level of honesty, integrity, and impartiality in their conduct as it relates to ethics, conflicts of interests and the acceptance of gifts. This ensures that all actions of, and work performed by, MNPS employees are transparent and ensures any actual or perceived misconduct or conflict of interest will be avoided. Although certain behavior may not break any particular law or may not be in violation of any strict interpretation of the law, certain behavior is not acceptable by MNPS. Date Updated June 2015 Revision History November 2010 Review Bi-Annually Persons Covered This policy applies to all MNPS employees. All MNPS employees, officers and agents must comply with the standards described herein and in any other additional MNPS documents pertaining to conflicts of interest and ethics. Date Last Reviewed June 2015 Employee Responsibilities: MNPS employees must avoid any action, whether or not specifically prohibited by this policy or departmental code of ethics, which might result in or create the appearance of:         Using their position in MNPS for private gain; Providing preferential treatment to any person or business entity; Discriminating against any person or business entity; A lack of sobriety or placing one’s self in a compromising or unseemly situation; Losing the ability to make decisions that are independent and impartial; Making a decision that does not follow approved guidelines and that is not in the best interest of MNPS; Affecting adversely the confidence of the public in the integrity of MNPS; and/or Reducing the operational efficiencies or economies of MNPS. 1 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 Each employee is responsible for the maintenance, integrity and accuracy of MNPS documents and records in order to comply with all regulatory and legal requirements and also to ensure records are available to support MNPS business practices and actions. Questions on Interpretation of this Policy When an MNPS employee is in doubt as to the proper interpretation of this policy, he or she is expected to consult and seek the advice of his or her supervisor and/or the MNPS Director of Purchasing. Responsibilities of the Supervisor Each MNPS employee who acts in a supervisory capacity is responsible for ensuring compliance with this policy by those employees in his or her line of authority. Should such a supervisory MNPS employee become aware of a potential or real violation of this Policy by an employee outside of his or her line of authority, that supervisory employee must report and disclose the real or potential violation to the MNPS Director of Purchasing. Consequences of Policy Violation Any MNPS employee who violates the provisions of this Policy is subject to:    Disciplinary action, up to and including termination from employment under the processes defined in the MNPS Support Employee Handbook (for Support Employees) and in T.C.A. § 49-5-511 (for Certificated Employees); Personal liability to MNPS; and Referral to appropriate law enforcement authorities if criminal actions are involved or suspected of being involved. Conflicts of Interest MNPS prohibits any employee, officer or agent of MNPS to participate in the selection, award or administration of a purchase or contract if a conflict of interest, real or apparent, would be involved. According to Education Department General Administrative Regulations (EDGAR) a t 2 C . F . R . 2 0 0 . 3 1 8 ( c ) ( 1 ) , no employee, officer or agent of MNPS shall participate in selection, award, or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. No MNPS employee shall solicit or accept gratuities, favors or anything of monetary value from contractors, potential contractors or parties to subagreements. Such a conflict of interest arises when:  The employee, officer or agent,  Any member of his/her immediate family,  His/her partner, or 2 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110  An organization which employs or is about to employ any of the above parties, has a financial or other interest in or other tangible personal benefit from a firm considered or selected for the award or contract. Any MNPS employee, officer or agent responsible for reviewing and evaluating applications, proposals or other documents related to awarding funds must promptly disclose any conflict of interest to the MNPS Director of Purchasing, who will review the disclosed potential conflict of interest and take any action(s) deemed appropriate or required to address, manage or resolve the matter. If the MNPS Director of Purchasing is involved in the reported conflict, the individual reporting the potential conflict should disclose it to the MNPS Chief Financial Officer. If appropriate, these disclosures and conflicts will be reported to the Metropolitan Attorney assigned to MNPS, who may determine whether additional actions or sanctions should be recommended or implemented. Under certain circumstances, it may be necessary for an individual to recuse himself or herself from participating in any actions related to a purchase or contract award where a conflict may exist. After disclosing a possible conflict of interest, the MNPS Director of Purchasing will make a decision about the circumstances surrounding the potential conflict and may approve or waive it. Upon the decision by the MNPS Director of Purchasing, or if the individual(s) involved believe(s) it is appropriate or necessary, the MNPS employee, officer or agent should immediately recuse himself or herself from participating in the award and may not be privy to any nonpublic information relating to the award. The recusal of any individual must be documented in the official files maintained for the award. Any circumstances or situations that present an actual conflict of interest, or the appearance of a conflict of interest, must be brought to the immediate attention of the employee’s supervisor for investigation and appropriate action. Personnel responsible for reviewing and evaluating applications, proposals, or other documents related to awarding funds will be trained on this conflict of interest policy, including what a conflict of interest is and when it may arise. Upon understanding MNPS conflicts policy, appropriate staff must sign a certification that sets forth the standards for determining whether a conflict of interest exists. MNPS will maintain this certification and provide it to the appropriate personnel to assist with identifying and resolving any potential conflicts of interest. A copy of the certificate can be found at the end of this policy. Gifts No MNPS employee, officer or agent shall solicit or accept, directly or indirectly, on behalf of himself, herself, or any member of the employee, officer or agent’s household or parties listed above, any gift, gratuity, preferential discounts, service, favor, lavish entertainment or meals, lodging, long distance transportation, loan, loan guarantee, or anything of monetary value from any contractors, subcontractors, potential contractors, or parties to purchases, agreements, or awards. MNPS will not award contracts to independent contractors who have solicited contracts by means of offering gratuities, 3 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 favors or anything of monetary value to the MNPS employee, officer or agent responsible for awarding contracts. Any gift that is given by one MNPS employee, officer or agent to another MNPS employee, officer or agent that provides for personal financial gain or favor is not acceptable. These disallowed gifts shall not be accepted by the receiver. If a gift is accepted inadvertently or in error, the item must be returned to the giver/supplier or donated to a charity in the name of the giver/supplier. If any MNPS employee receives a gift or favor, he/she must report the gift or favor in writing within 7 days to his/her supervisor. Offers from non-MNPS individuals or entities shall be referred to the MNPS Director of Purchasing. Offers from individuals or entities to donate furniture, equipment, supplies, etc. shall be referred to the MNPS Inventory Control Manager. Donations shall not be accepted if they are given to influence, or appear to have the possibility of influencing, a decision that provides monetary or other gains to the donor or the person accepting the donation. MNPS recognizes situations may occur in which the financial interest of a gratuity, favor or gift is not substantial or is an unsolicited item of nominal value. The prohibition on soliciting or accepting gifts, entertainment, favors or gratuities of nominal value does not apply to:         Loans from established financial institutions made in the ordinary course of business on usual and customary terms, so long as there are no guarantees or collateral given by any person described in this section; Unsolicited advertising materials of nominal value, including items considered “giveaways” at professional conferences, such as pens, pads, etc.; Meals not considered lavish (e.g. appetizer + entrée + sides + desert = less than $35) related to or linked with business dealings; Food and refreshments of nominal value when they are part of the employee’s participation in a charitable, civic, political or community event, which bears a relationship to the employee’s office and the employee is attending in an official capacity. Admission to charitable, civic, political, or other public events. Refreshments or meals of nominal value provided at business meetings. Any employee who travels on business for MNPS may keep the points or travel awards earned as a result of the MNPS supported business travel. Transportation and/or lodging provided by a vendor when attending a public event. Any lodging or long-distance transportation provided by a vendor and not by MNPS must be pre-approved by the Director of Schools in writing and must be for the purpose of furthering the mission of MNPS. This practice is highly discouraged as it is difficult, if not impossible, to avoid creating the impression of a conflict of interest. Prior to accepting such an offer, the employee should consult with the MNPS Director or Purchasing for advisability. 4 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 MNPS employees must always be aware that meetings outside of MNPS, in both public venues and private venues, with companies and organizations that do business with MNPS, may raise questions as to the true purpose of the meeting, regardless of who actually pays for the employee’s meal, ticket, attendance fee, or other item related to the meeting. Financial Interests No MNPS employee shall enter into or derive a benefit, directly or indirectly, from any contractual arrangement with MNPS or any of its agencies or vendors. In recognition of the fact that many husbands and wives have separate careers, the normal employment compensation of a spouse whose regular, ongoing employer or business has a contractual arrangement with MNPS shall not be considered a “benefit” to the MNPS employee, provided the conflict of interest was properly disclosed by the MNPS employee(s) involved, proper recusal procedures were followed and the contract with MNPS was procured with open competition pursuant to procurement requirements and without any participation, assistance, or influence from the MNPS employee. No MNPS employee shall request or demand that any other person or entity make or offer to make any monetary contribution or other type of contribution of value to any campaign or to any political campaign committee in exchange for, or as a condition to, receiving some benefit from MNPS or any department, agency or official thereof, to the person or entity whose contribution is requested or demanded, or to the person making the request. Any MNPS employee having stock or ownership interest in public or privately held companies that do business, or may potentially do business, with MNPS must report this relationship to his/her supervisor. If the employee is involved in the MNPS decision making process for the award of purchases or contracts, the employee must properly disclose the relationship to the MNPS Director of Purchasing and may be recused from award process. Use of Information No MNPS employee shall directly or indirectly:  Use, disclose, or allow the use of official information which was obtained through or in connection with his or her employment, and which has not been made available to the general public, for the purpose of furthering the private interest or personal profit of any person, including the employee, or  Engage in a financial transaction as a result of, or primarily relying upon information obtained through his or her MNPS employment. Use of Government Property No MNPS employee shall use the facilities, equipment, personnel or supplies of MNPS or its agencies other than for officially approved MNPS related activities, except to the extent that they are lawfully available to the general public. 5 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 Other Ethical Responsibilities Individuals who prepare, approve, sign or submit E-rate applications, technology plans or other forms related to the E-rate program are subject to the requirements contained herein in addition to more stringent ethical requirements. For more information, see Federal Communications Commission Regulations located at 47 C.F.R. § 54.503. Any questions about this policy, including advice for addressing or handling potential conflict of interest issues may contact the MNPS Director of Purchasing at (615) 2598533. References and Authority Metropolitan Nashville Code of Laws, Chapter 2.222 Standards of Conduct Federal Communications Commission Regulations, 47 C.F.R. § 54.503 FM 2.111 Purchasing Policy MNPS (MNPS Policy) FM 2.113 Initiating Contracts (MNPS Policy) MNPS Employee Handbook T.C.A. § 49-5-511 T.C.A. § 49-2-301 T.C.A. § 49-5-1001 2 CFR § 200.318(c)(1) 6 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures. Ethics, Conflicts of Interest and Acceptance of Gifts HC 5.110 The following Conflict of Interest Statement must be signed by any MNPS employee, officer or agent responsible for awarding contracts or purchases within MNPS. The Statement must be signed by each such person prior to the time of involvement in an award. The statement will be effective for one year from the date of signing and need not be re-signed for additional award involvement prior to the anniversary of signing. Conflict of Interest Statement for Awarding Contracts By signing below, I affirm that I have no conflict of interest, real or apparent, that might affect my objectivity and impartiality in preparing, submitting, approving, evaluating or administering any non-competed contract, purchase, proposal or application, or in evaluating, awarding or administering any competitive contract or purchase to provide goods and/or services to Metropolitan Nashville Public Schools (MNPS). I also affirm that I have neither solicited nor accepted any gratuities, favors or anything of monetary value from vendors/contractors, potential vendors/contractors or subcontractors who are or may do business with MNPS. I also affirm that I have read MNPS’ Code of Conduct for Awarding Contracts (contained in FM 2-113 Contracts Policy) and agree to abide by the provisions contained therein. In addition, I have received training on MNPS Policy HC 5.110 Ethics, Conflicts of Interest and Acceptance of Gifts and agree to adhere to its procedures, including reporting, disclosure and recusal. Signature Date Printed Name 7 Visit http://policy.mnps.org for a complete listing of MNPS Policies and Procedures.