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v i s i t our website a t www.rniamidadeiq.orqSuperintendent

Schools (MDCPS)

Date: u n e 1 1 , 2008Re: MDCPS OIG Final Report on John A. Ferguson Senior High Schoo l Retreats

Attached please find a copy of the Office of the Inspector General's (OIG ) final report onthe above-captioned matter. Th e subject matter of this report is one that you requested usto investigate after the Chief Auditor found instances of inappropriate spending duringon e of its routine audits. This report, in draft form, was provided to Dr. DonaldHoecherl, Ms. Estelle Wild and Mr. Richard De Aguerro, Executive Director of MECA(Magnet Ed ucational Cho ice Association, Inc.).The OIG received a response from Ms. Wild an d her attorney (Attached in Appendix A)and we granted an extension of time to Dr. Hoecherl to provide a written response.While the OIG did not receive a written response to the draft reportper*se , we did receivean abbreviated comment from Mr. Hoecherl's attorney that Dr. Hoecherl "absolutely didnothing wrong" although he believes that Dr. Hoecherl "could have followed protocol aLittle better." (See attached correspondence between the OIG and Dr. Hoecherl inAppendix B). No response was received from MECA.

No material changes to the draft report were made. While the OIG continues tobe engaged in a joint investigation with the Miami-Dade State Attorney's Office, it doesnot preclude the MDCPS and/or School Board in taking any action(s) deemed warrantedin tlus matter. We also recommend that the Administration review the enforcement ofSchool Board RuIes relating to the authorizations and paperwork (i.e. contracts,engagement letters, invoices, etc.) required to create purchase orders and the submissionof invoices and other b ack-up do cumentation for the release of payment. Finally, it isrecommended that the policies related to vendor performance, or in this case, vendor non-performance also be reviewed and that appropriate enforcement action be considered onthis front.

cc : The Honorable Agustin J. Barrera, Chair, Miami-Dade County School BoardMs. JuIie Ann Rico, Miami-Dade School Board AttorneyMr. Allen Vann, Chief A uditor, Miami-Dade County Public SchoolsDr. Donald A. HoecherlMr. Richard De Aguerro, Executive Director, MECAMs. Estelle Wild, E. Wild Entertainment, Inc,CM/lrnc:/my docurnents\oig cases 2008\ig08-04sb-find report cover memo


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OFFICE F THE INSPECTORENERALFOR

MIAMI-DADEOUNTYUBLICCHOOLS

John A. Ferguson SeniorHigh SchoolRetreatsIG08-04SB

June 11,2008


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OFFICE F THE INSPECTORGENERALMIAMI-DADEOUNTYP ~ L I CCHOOLSFinal Report on John A. Fergusoa Senior High School Retreats

INTRODUCTIONSYNOPSISOIG JURISD~CTIONALUTHORITYBACKGROUNDINVESTIGATIONCONCLUSIONRECOMMENDATIONS

Appendix A: Correspondence from and on behalf of M s. Estelle WildAppendix B: Correspondence on behalf of Dr. Donald HoecherlOIG Exhibits 1-32


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OFFICEF THE INSPECTORENERALMIAMI-DADEOUNTYPUBLICCHOOLSFinal Report on John A. Ferguson Senior High School RetreatsThe Inspector General may, on a random basis, p erform a udits, inspections an dreviews of all School Board contracts. The Inspector General shall have the power to

audit, investigate, monitor, oversee, inspect and review the operations, activities andperformance and procureme nt process including, bu t not limited to , project design,establish of bid specifications, bid submittals, activities of the contractor and itsofficers, agents and employees, lobbyists, and of MDCPS staff and elected officials inorder to ensure compliance with contract specifications and detect corruption and fraud.

The Inspector General shall have the power to review and investigate anycitizen's complaints regarding School Board projects, programs, contracts ortransactions. Th e Inspector General may exercise any of the powers contained in theILA, upon his o r her own initiative,

The Inspector General shall have the power to require reports and theproduction of records from the Superintendent, School Board members, School Districtdepartments and allied organizations, and District officers and employees, regardingany matter within the jurisdiction of the Inspector General.

Dr. Donald A. HoecherlDr. Hoecherl ha s been an employee of MDCPS since 1974. In June 2007, he

was promoted to Administrative Director of Professional Development. In February2008, he was temporarily assigned to Region 111.From A ugust 2003 to June 2007, he was the principal of Ferguson SHS.During his tenure with MDCPS, Dr. Hoecherl has served in various positions includingteacher, counselor, assistant principal, and principal. Dr . Hoech erl has been theprincipal of three different MDCPS high schools since 1992 and has over 15 yearsexperience as a principal.According to MD CPS records, among the many duties of a high schoolprincipal are: to monitor the expenditure of funds in accordance with board rules,

supervise administrative staff in the procurement of goods and services, and to ensurethat federal funddgrants are used appropriately.

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OFFICE F THE NSPECTOR GENERALMIAMI-DADEOUNTY UBLICCHOOLSFinal Report on John A. Ferguson Senior High School Retreats

Annual RetreadsThere are approximately 50,000 employees working for the MDCPS. This

includes approximately 22,000 teachers. MDCPS provides opportunities fo r periodictraining through wo rkshops, seminars and retreats instructed by both MDCPS personneland private vendors. Th e terms workshops, seminars and retreats are usedinterchangeably by the MDCPS .

The investigation revealed that Ferguson SHS hosted five retreats, each heldbefore the beginning of the school year, usually in JuIy or August. The purportedpurposes of the annual retreats were to introduce the newly hired staff to the existingstaff, to familiarize the newly hired staff with the school's stated mission and culture, tobuild morale among all staff, and to integrate all areas of adm inistration into its"academy method" of teaching. Therefore, everyone (i.e. teachers, support staff,temporary staff, custodiaI staff, security guards, and food service personnel) wasinvited to attend. With each successive year, the Ferg uson SHS annual retreat wasprogressively larger and mo re expensive than the previous yea r. While attendance atthe annual retreats was not mandatory, it was highIy encouraged and recommended thatall staff attend . Staff was permitted to bring friends and family members; however, anadditional charge would be collected to offset the costs of meals for friends and familymembers joining the planned lunchesldinnerslbanquets, etc. There was no cost toFerguson SHS employees to attend the retreat.

The curriculum for the annual retreats, while different in specific topics,reinforced similar general themes. Ferguson SH S staff pIanned and coordinated thecurriculum, subject to D r. Hoec herl's approval. D r. Hoecherl personally negotiatedwith the hotels and Ferguson SHS staff was responsible fo r the logistics of the retreats,e.g., set up, check-in, production and disbursement of handouts and course materials,etc. Most presenters were MDCPS employees. It appears that no on e wascompensated for conducting retreat presentations, other than receiving meals andlodging in a few cases. In three of the five retreats examined by the OIG, third partieswere falsely represented on the purchase orders as putting on the retreat. The chargesfalsely represented on the purchase orders and accompanying invoices were forregistration fees. How ever , Dr. H oecherl and Ferguson SH S staff actually organized,planned, and essentially "put on" the retreat through the hotel and its staff. Instead, thethird parties w ere merely conduits through which Dr. Hoech erl passed SB funds. Bypassing the h n d s through these entities, Dr. Hoecherl gained discretion and control asto how these funds would ultimately be spent. These schemes allowed Dr . Hoecherl toby-pass or circumvent MDCPS Procurement an d Accounts Payable Internal controls.



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OFFICEF THE INSPECTORENERALMIAMI-DADEOUNTY UBLICCHOOLSFinal Report on John A. Ferguson Senior High School Retreats2007 Ferguson SHS Retreat, Held at Hawk's Cay Resort

The 2007 Ferguson SH S Retreat was held at Hawk's Cay Resort (Hawk's Cay)from 811012007 through 8/12/2007. Hawk's Cay is a beachfront resort an d marinalocated on Duck Key in the Florida Keys. The OIG investigation disclosed that Dr,Hoecherl made false statements on the originating purchase order for services andknowingly caused fa k e invoices to be subm itted to MDCPS Accounts Payable to obtain$1 15,391 in funding for this retreat.'

A. The Hawk's Cay ContractThe OIG's review of documents and interviews of witnesses related to theHawk's Cay retreat revealed that sometime on or before 5/8/2007, Dr. HoecherIpersonally negotiated with Hawk's Cay for a retreat to be held from 8/10/2007 through

8/12/2007, resulting in an executed services contract with the resort, on behalf ofFerguson SHS. mxhibit 3)According to SB rules, D r. H oecherl had no authority to sign the contract withHawk's Cay Resort or to unilaterally enter into any contract of this type.3 The contractcontains a set rate for lodging and meals to be served during the event. Furthe r, th econtract includes a $20 room resort fee, which allows b r access to amenities suchas the pool and lagoon area, boat ramp, tennis courts, and fitness center. The contractalso stipulates various monetary amounts that Ferguson SHS would be ch arged in theevent that Ferguson SHS cancelled the retreat. The se amounts vary depending uponhow fa r in advance of the event th e retreat is cancelled. Lastly, a booking recap sheet,dated 5/9/2007, discovered by the OIG, shows that there was a conscious effort bythose planning the event to disguise the purchase of alcoholic beverage s. Th edocument, in the comments section, notes: "Must hide all alcoholic charges on bills- list as something else." (Emphasis added by OIG) (Exhibit 4)

B. The MECA Purchase OrderWhiIe the executed contract was between Dr. Hoecherl, on behalf of Ferguson

SHS, an d Hawk's Cay, Dr. HoecherI directed his staff to create a purchase order (PO)in favor of MECA, as the vendor pu rportedly conducting the 3-day workshop on 8/10through 8112/07.

Though Dr. Hoecherl was promoted during the planning of the 2007 Hawks's Cay retreat, he,nevertheless, continued to spearhead the planning and organization of the retreat. The new FergusonSHS principal had little to do with the event's planning, funding or organization.See footnote 1 and the cited School Board rules.

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OFFICEF THE INSPECTOR ENERALMIAMI-DADEOUNTY UBLICCHOOLSFinal Report on John A. Ferguson Senior High School RetreatsMECA is an acro nym for Magnet Educational Choice Association, [nc. MECAis described as a MDCPS support organization, set up to receive charitable donationson behalf of MDCPS from third parties, i.e . parties or entities unrelated to MDCPS.

MECA was an approved SB vendor at the time the MECA PO was submitted, and assuch could receive payments. However, MECA was not in the business of organizingor facilitating workshops or seminars. The OIG has discovered that on 6/22/2007,approximately six (6 ) days before submitting the MECA PO, Dr. Hoecherl requestedand arranged for the new Ferguson SHS principal and the Ferguson SH S activitiesdirector to open an account at MECA in favor of Ferguson SHS. (Exhibit 5)The actual PO was created by a Ferguson SHS clerical employee, Ms. Asuncion(Me rcy) Valdes. M s. Valdes stated that Dr . Hoecherl directed her to type the PO andgave her all the information necessary to complete it . PO number R02365875, dated6/28/2007, specifies MECA as the vendor and was for $1 15,391. (Exhibit 6 ) The

description of services reads:Registration Fee. Workshop for 3 days. Please send attn:Dr. Hoecherl. This is for a 3 day workshop 150participants. Starting August 10 thru August 12 , 2007sponsor by MECA Inc..

C. The MECA Invoice vs. the Hawk's Cay InvoicesOne month after the retreat, MECA submitted invoice 1043, dated 9/11/2007,to MDCPS requesting payment of the full $115,391 for providing the 3-day workshop.(Exhibit 7) The MECA invoice w as subm itted to MDCPS Accounts Payable. Beforeacting on an invoice, Accounts Payable requires that the departmentlschool thatsubmitted a PO for goods or services review the invoice and certify whether or not the

goods and services in the specific invoice amount were actually received. A copy ofthe MECA invoice was forwarded to Ferguson SH S for approval. The MECA invoicewas stamped "GOOD S RECEIVED PE R ORDER - LOC 7121," and bears D r.Hoecherl's signature. The stamp indicates that on 9/14/2007, D r. Hoecherl certifiedthat $115,391 worth of goods or services were received by Ferguson SHS fromME CA . An interview of Richard De Aguerro, Executive Director of MECA, disclosedthat MECA did not provide any goods or services and did not undertake any activitiesrelating to a workshop. He stated that no registration fees were charged by MECA.

Although MEC A submitted the aforementioned invoice for $1 15,3 91, the actualHawk's Cay invoice, dated 8/15/2007, was also sent to Ferguson SHS. Hawk's Caytotal bill was only for $8 3,97 4.40 . This invoice was also stamped "GO ODS RECEIVD



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OFFICE F THE INSPECTORENERALMIAMI-DADEOUNTY UBL ICS CHOO L SFinal Report on John A. Ferguson Senior High School RetreatsPER ORDER - LOC 7 121" and bears Dr . H oecherI's signature dated 9/7/07 - ou rdays before he certified that the 3-day retreat cost $115,391. (Exhibit 8)

MECA received a one-page Hawk's Cay invoice in the actual amount of$83,974.40. It then requested from Ferguson SH S additional supporting documentation.MECA was provided with copies of the master hotel bill, which included itemized hotelreceipts for the rooms and meals. These hotel receipts did not reflect any itemizedcharge for alcoholic beverages. The itemization page for the Saturday dinner banquetlisted buffet dinner charges for 237 people at a cost of $60 per person. The total costof this dinner buffet was $17,064, which included $2,844 as a 20% service charge.Nowhere on the invoice does it list alcoholic beverages. (Exhibit 9) However, recordsobtained directly from Hawk's Cay by the OIG show that the actual expenses includedan open bar charge for the 237 guests. The cost for the open ba r was $4,503, or $19per person. The buffet cost dropped to $41 per person, for a total of $9,717. (Exhibit10) With the associated service charges, the bill totals were the same.

Dr. Hoecherl's purchase of alcoholic beverages, totaling $4,503, we believe is aclear violation of School Board Rule 6Gx13-3C-1.17, which prohibits certainpurchases. (Exhibit 11) A review of the Hawk's Cay invoice reveals that the totalamount also includes service chargesftips, wh ich we also believe cannot be paid forusing MDCPS funds.D . The MoneyUnknow ingly relying on the fraudulent information in both the original MECA

PO and Dr. Hoecherl's stamp on the MECA invoice stating "GOODS RECEIVEDPER ORDER - LOC 7 12 1," Accounts Payable approved the MECA invoice andissued a MD CPS check payable to MECA in the amount of $115,391 . These fundswere deposited into the MECA account in favor of Ferguson SHS. (Exhibit 12) Butfor Dr. Hoecherl's stamp and signature on the invoice certifying that goods (orservices) had been received, the check would never have been issued.

An additional area of concern was the attendance of family members and guestsof MDCPS employees at the retreats. Ferguson SHS staff was allowed to bring familyand/or guests to the retreats. Staff was informed that if their family members and/orguests intended to eat with the retreat participants, the staff member would have to paya $75 per adult and $35 per child fee to include the Friday w elcome reception, theSaturday evening dinn er, and the Sunday breakfast. Th e OIG has found that severalthousand dollars was collected and receipts were issued. How ever, according toFerguson SHS's school treasurer, none of th e collected funds was paid to Hawk's Cay.Mr. Vincent Dawkins, Executive Director of MDCPS Account's Payable, stated thatthe funds collected fr om friends and family members for their meals should have been



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OFFICE F THE INSPECTORENERALMTAMGDADEOUNTY UBLICCHOOLSFinal Report on John A. Ferguson Senior High School Retreatsdirectly paid to Hawk's Cay, which should have then been off-set from the remainingtotal. The invoiced total would then only reflect charges related to Ferguson SHSemployees. M r. Dawkins stated that MDCPS funds should in no way have paidexpenses related to anyone other than MDCPS employees. The money collected fromthe Ferguson SH S staff remains on deposit in Ferguson SHS's Special PurposeAccount, according to the school treasurer.

The $115,391 in district funds that was paid to MECA was remitted back toMDCPS on 3/4/2008, following a written request from th e Inspector General. (Exhibit13) The money was placed in a special liability account based on the advice of theSchool Board Attorney. While the investigation was on-going and subsequent to theremittance of funds back to MDCPS, MECA requested that it be removed from the listof approved SB vendors, effective 2/19/2008 . (Exhibit 14)2006 Ferguson SH S Retreat, held at Dora1 Mario# Golf & Spa

The 2006 annual retreat was held at Doral Golf Resort & Spa (Doral), aMarriott Resort, from 8/4/2006 through 8/6/2006. This retreat was a 3-day, in-Countyevent, costing over $73,000 in district and federal grant funds. Th e OIG investigationdetermined that D r. H oecherl falsified and/or caused another to falsify statements onboth the originating PO s and on invoices submitted for paym ent.

A . The Doral ContractThe OIG 's review of documents and interviews of witnesses related to the Doral retreatrevealed that sometime on or before 5/19/2006, Dr. Hoecherl contacted Doral andnegotiated with th e resort, either personally or via Ferguson SH S staff, The resultingcontract, dated 5/19/2006,was executed by Dr. Hoecherl, on behalf of Ferguson SHS,again in violation of SB rules.4 (Exhibit 15)The contract stipulates various amounts that Ferguson S HS would be charged in theevent that the retreat was cancelled. The contract contains a set rate for lodging andcharges for meals to be served at the various retreat events. One of the dinner chargesindicates that beer and wine is included in the cost,

B. E. Wild Entertainment, Inc. (WiId) Purchase OrdersAfter D r. Hoecherl executed a contract with Doral, he submitted to MDCPSProcurement the first of two PO s seeking funds for the retreat. The POs, however,

"ee footnote I an d cited SB ules.



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OFFICE F THE INSPECTORGENERALMIAMI-DADEOUNTYUBLICCHOOLSF i n d Report on John A. Ferguson Senior High School Retreatswere made out in favor of E. Wild Entertainment, fnc. (Wild), a registered vendor withMD CPS. WiId is owned and operated by Estelle Wild, a former MDCPS employee.

The DIG learned that Ms. Valdes of Ferguson SHS's administrative staffprepared both POs pursuant to D r. Hoecherl's instructions. The first Wild PO ,#R023 10864and dated 7/24/06, (Exhibit 16) describes the services as:Registration fee 150 participant magnet wo rkshop, . . Thisis for the magnet workshop sponsor by E. WildEnterainment [sic], Inc. For 150 participants to attend 2L/z day workshop for the school year 2006 - 2007...

The PO contained a unit price of $395 per person. The total amoun t was for$59,250 to be drawn from federal grant funds. Shortly thereafter, Dr. Hoecherlsubmitted a second PO (number R023 16654, dated 7131/06) in favor of Wild for$13,825 to fund an additional 35 attendees for the "workshop," (Exhibit 17) Thefunds for the second PO were to be drawn from MDCPS general funds. The two POscombined authorized Ferguson SHS to spend $73,075 on registration fees for theAugust 2006 workshop.

C. Wild Invoices vs. the Doral InvoiceWild submitted tw o invoices for payment. The invoiced amounts match exactly

the amoun ts authorized by the POs. The first Wild invoice, dated 8/2/06, is addressedto Ferguson SH S at the school's address. (JZxhibit 18) The invoice describes the eventas: "Inservice Seminars 2 and L/2 Day Workshop" at the Doral Marriott Hotel for 150confirmed registrants at $395 per registration. The invoice was stamped "GOODSRECEIVED PER ORDER - LOC 7121" and bears Dr. H oecherl's signature with thedate 8/3/06 - he day before the retreat. As such, Dr. Hoecherl fraudulently certifiedthat Ferguson SHS had received the goods (or services) in the specified amount. Thisinvoice was, thereafter, forwarded to Accounts Payable for payment.The second Wild invoice submitted for payment of $13,825 bears the date

9/8/2006 and describes that it is for an additional 35 confirmed registrations for theseminar/workshop at the Doral Marriott Hotel. (Exhibit 19) This invoice also wasstamped, "GOODS RECEIVED PER INVOICE - LOC 7121" and bears Dr .Hoecherl's signature dated 9111/06. The invoice was also forwarded to AccountsPayable for payment along with the corresponding PO .

OIG Special Agents interviewed Ms. Estelle Wild, who confessed that she didnot provide any services of organizing, planning or conducting a w orkshop or seminar,which would have entitled her to charge a per person registration fee. M s. Wild



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OFFICEF TH E INSPECTORGENERALMIAMI-DADEOUNTYUBLICCHOOLSFinal Report on John A . Ferguson Senior High School Retreads

explained that she only acted as a "fiscal agent" to deposit and pay bills. Forperforming this act, Wild was compensated at least $4,965.' Estelle WiId stated thather regular fee is 15% of the total event's cost. However, Ms. Wild stated that Dr.Hoecherl would only agree to pay her 10%. Ms. Wild stated that she accepted thislesser percentage as D r. Hoecherl had already made all of the event's arrangem ents.Ms. Wild's statement that she acted as a "fiscal agent" is corroborated by thedocuments related to this transaction. As stated above, Dr. Hoecherl executed abinding contract between Ferguson SHS and Doral on 5/19/2006. The OIG obtained aservice contract dated and executed on 8/2/2006 by M s. Wild, which is well over 2 and

95 months after Dr. Hoecherl planned, negotiated and executed the Doral contract. It isalso dated the same date as the first invoice. The W ild contract, while not executed byanyone from MDCPS, including Dr. Hoecherl, states that: "EWILD will create andexecute a meeting to be held o n the 4, 5h and 6th f August, 2006 at the Doral GolfResort & Spa.. ." The contract is for $59,250 and contains other language consistentwith that of the first PO. (Exhibit 20)

According to Mr. Vincent Dawkins of MDCPS Accounts Payable, had heknown that Wild only acted as a "fiscal agent", contrary to the work authorized in thetwo Wild POs and invoices, the MDCPS checks would never have been approved norissued. Mr. Dawkins could find no legitimate business rea son to h ire and pay a thirdparty to "pay the bills," when MDCPS maintains Accounts Payable, a MDCPSdepartment wholly devoted to the paying of MD CPS bills a t no charge to the usingagency or department.OIG Special Agents reviewed the Doral invoice and back-up documentationdated 9/14/2006 related to the retreat. The total cost of the retreat was $68,416.46.

The invoice included $3,705 in alcoholic beverages (247 bottles of premiudimportedbeer at $15 per bottle). Paying for alcoholic beverages w ith public funds is a violationof SB rules and a violation of federal law governing the authorized use of federal grantfunds.6 Further, the invoice revealed that $6,466 in tips was included in the charges.(Exhibit 21)

D. The MoneyUnknowingly relying on the fraudulent information submitted by Dr. Hoecherl,Accounts Payable ap proved the two W ild invoices and caused two MDCPS checks tobe issued payable to E. Wild Entertainment, Inc. MDCPS check #512009 for $59,250

Ms. Wild admitted to receiving an additional $1,200 paid to her by Co-Nect, Inc. as part of he r fees.Th e OIG ha s not ye t obtained documents verifying this payment.See School Board Rule 6Gx13-3C-1.17, previously cited and Federal OM B Circular A-87, COSTPRINCIPLES FOR STATE, LOCAL, AN D INDIAN TRIBAL GOVERNMENTS (Revised 5110104).Page 10 of 15IG08-04SB June 11 , 2008


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OFFICEOF THE NSPECTORENERALMIAMI-DADEOUNTYUBLICCHOOLSFinal Report on John A. Ferguson Senior High School Retreatswas issued on 811112006 (Exhibit 22) and MDCPS check #5 16334 for $13,825 wasissued on 10/6/2006. (Exhibit 23) But for Dr. Hoecherl's stamps and signatures onthe two Wild invoices and Wild PO certifying that goods (or services) had beenreceived. the checks would never have been issued.

On or about 10/3/20 06, E stelle Wild issued a personal check , in the amount of$68,110, payable to John A . Ferguson Special Purchases. The memolnote line on thecheck says Faculty Retreats. (Exhibit 24) The check was accompanied by a letterfrom Ms. Wild to Dr. Hoecherl. (Exhibit 25) It states:Please accept this donation of $68,110.00 to thePrincipal's special purpose account to help offset the costof the retreat of 2006. 1am happy to be able to help withthe professional developm ent of the faculty and staff ofJohn A . Ferguson Senior High School.

The funds were marked as a donation and were deposited into the Ferguson SHSinternal Special Purpose Account.During her interview with the OIG, Ms. Wild admitted that this was not adonation of her personal funds. Instead, it was a return of SB funds and it was done atDr. Hoecherl's request. Ms. Wild stated that Dr . Hoecherl dictated the donation letter,which she wrote and then submitted to Ferguson SHS. Ms. Wild kept a portion of theSB funds in partial payment for her fee for acting as "fiscal agent." This transactionha d the effect of masking official MDCPS funds as a private donation, w hich is not

subject to the same spending restrictions. According to School Board Rule 6Gx13-33-1.111 Donations and Giftsf PropePby, the $68,110 donation from Estelle Wild wasrequired to be presented to the SB as an agenda item seeking Board acceptance.However, Dr. Hoecherl failed to do this and the sham donation was never made knownto the SB.On 11/9/06, the Doral retreat costs, totaIing $67,416.66, were paid from theFerguson SHS Special Purpose Account, thus masking the true source of the funds -that being a combination of the federal grant funds (PO # I and WiId invoice # I ) andMDCPS funds (PO #2 and Wild invoice #2). (Exhibit 26)As in the case of the Hawk's Cay retreat, the OIG is concerned that moniescollected from staff to pay for mealsievents for friends and family members were notcorrectly handled. While monies were collected and receipts were issued, the monies

were not directly applied against the resort's event charges and, thus, no t deductedfrom th e final Doral bill. Instead, Dr. Hoecherl left th e money deposited in Ferguson

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OFFICEF THE INSPECTOR GENERALMIAMI-DADEOUNTY UBLICCHOOLSFinal Report on John A. Ferguson Senior High School Retreats

SHS's Special Purpose Account. The charges for friends and family were ultimatelypaid by the federal grant and M DCPS funds,2005Ferguson SHS Retreat, held at Four Points Sheraton Resort Hotel

The 2005 retreat was held at the Four Points Sheraton R esort (Sheraton) locatedon Miami Beach. The hotel was formerly th e Marriott Fairfield Inn and Su ites and wasalso the site of the 2003 Ferguson SHS retreat. The OIG investigation of the 2005retreat held on 7/29/2005 through 7/31/2005also disclosed false statements on th eoriginating POs and phony invoices submitted to MDCPS to obtain $46,800 in fundingfor the retreat.

A . The Sh eraton ContractAn OIG Special Agent spoke to Howard Konetz, General Manager of Charles

Groups Hotel. M r. Konetz recalls that he personally negotiated a contract with Dr.Hoecherl, which was reduced to writing and executed by both parties. The contractcalled for the Sheraton to provide hotel rooms, meals and conference faciIities for theretreat. It was signed by Dr. Hoecherl on 6/20/2005. (Exhibit 27)

B. The Co-Nect Purchase OrderAfter D r. Hoecherl contracted directly with the Sheraton, he submitted a PO toMDCPS Procurement to obtain funding for the retreat. The PO , numbered R02263469and dated 10114f2005, was prepared by Ms. Valdes at Dr. Hoeche rl's instruction. ThePO was for $46,800 at the cost of $360 per person for 130 registrants. (Exhibit 28) It

reads:Magnet workshop registration fees.. Summer Magnetworkshop conducted by Co-Nect for instructional andnon-instructional staff.. This purchase order is replacingoriginaI PO to expedite the effort of payment to vendor.

While the PO names Co-Nect as the vendor conducting the workshop, the OIGhas obtained a letter from D r. Hoecherl to the Sheraton, dated 6/27/2005, stating thatCo-Nect, Inc. has been enlisted to act as Ferguson SHS's fiscal agent to represent theschool in all fiscal matters related to the retreat. (Exhibit 29) As earlier reiterated byM r. Dawkins, Executive Director of Accounts PayabIe, there is no sound businessreason for Ferguson SHS to have hired someone to "pay the bills."

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OFFICEF THE INSPECTORENERALMIAMI-DADEOUNTYUBLICCHOOLSFinal Report on John A. Ferguson Senior High School RetreatsC . Co-Nect and Sheraton InvoicesCo-Nect submitted invoice 156258, dated 11/ 1412005, to MDCPS requestingpayment of $46,800. (Exhibit 30) The description reads:

Registration fee for 130participants @ $360.00 perperson Workshop July 29, 30, 31This invoice, like the others described in this report, was stamped "GOODSRECEIVED PER ORDER - LOC 7 121." Dr. Hoecherl authorized payment of thisinvoice through his signature dated 11/14/2005. The replacement PO, dated

10/14/2005,was also stamped "GOODS RECEIVED" and was signed by Dr.Hoecherl, albeit not dated.Relying on the false information in the PO and Co-Nect invoice, which wereboth approved by Dr. H oecherl, Accounts Payable paid the invoice. M r. Dawkins,Executive Director of Accounts Payable, has told OIG Special Agents that had it beenknown that Co-Nect did not actuaIly conduct the work shops, but merely acted as a"fiscal agent," the invoice would never have been approved for payment of $46,800.The OIG has interviewed Ferguson SHS employees who attended this retreat.They advised that the retreat was planned and organized by Ferguson SH S employees atDr. Hoecherl's direction. At no time did anyone from Co-N ect ever assist in any of theplanning and coordination of th e event. Co-Nect only supplied one employee, to act asa presenter at the retreat. Ferguson SHS employees arranged the other retreat

presentew7

2004 Ferguson SHS RetreatThe 2004 retreat consisted of a day-workshop held at Ferguson SH S and anevening event held at Christ the King Lutheran Church . Our review of the 2004 retreathas not revealed any improper spending or questionable authorizations. Throughinterviews with Ferguson staff, we found that the 2004 workshop curriculum was verysimilar in theme and format as the curriculum presented at the 2003, 2005, 2006 and

2007 retreats. A main difference, however, was the cost to put on the 2004 workshopversus the costs for the other years' retreats, Additionally, funding for the 2004evening event appears to have come solely through donations and other funds from the

' The OI G has been unabie to interview anyone from Co-Nect as of the issuance of the draft report. Theinternational corporation, Pearson Education. Inc. ,of Patterson, NJ, has since acquired Co-Nect, whichwa s located in Cambridge, M A in November of 2005,Page 13 of 15IG08-04SB June 11, 2008


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OFFICEF THE INSPECTORENERALMIAMI-DADEOUNTY UBLICCHOOLSFinal Report on John A . Ferguson Senior High School RetreatsFerguson SHS Special Purpose account. We have found, thus far, that approximately$1,300 was spent: from the Special Purpose account to pay for the 2004 event.

2003 Ferguson SlYS Retreat, Marn'ott Fairfield Inn & Suites, Miami BeachThe August 2003 retreat was held at the Marriott Fairfield In n & Suites8(Fairfield), just prior to the opening of Ferguson SHS. The retreat was funded withmonies transferred from other Miami-Dade County Schools and corporate donations.A . The Fairfield ContractThe OTG interviewed M r. Howard Konetz, General Manager, Charles GroupHotels. M r. Konetz recalls that he personally negotiated a contract with D r. Hoecherl,

which was reduced to w riting and executed by both par tie^.^ Mr. Konetz recalled thatthe contract was fo r hotel room s, meals and co nference facilities; he recaIled sendinginvoices to Fergu son SHS, and that the invoices were paid. Our review has disclosedapproximately $10,000 worth of charges related to the 2003 retreat. (Exhibit 31")Again, the OIG notes that D r. Hoecherl's unilateral negotiation and execution of thehotel contract may have been in violation of School Board rules.B. Vendor DonationsAn OIG review of Ferguson SHS's Special Purpose Account revealed thatfunding for this retreat was listed as donations. It appears that $16,750 in donations

was received from nine (9) sources, tw o of which were transfers from other MDCPShigh schools. Another $3,000 transfer came from the MECA account of theDepartment of STC Initiatives. A check was authorized for Ferguson SHS in paymentof an invoice from Ferguson SHS for "teacher training & strategic planning." Theremaining six sources of funding came from private and corporate donations. (Exhibit32) The OIG is concerned that school staff may be soliciting donations fromcorporations that the school does business with (o r in the case of Ferguson SHS, maydo future business with) and that such solicitations create a conflict of interest.

This is the same property where the 2005 retreat was held.Fairfield reports that this contract wa s shredded in January 2008, as part of normal corporate rulesrelated to record retention.lo There are two invoices for the Welcome Reception for $960 and two invoices for th e lunch and dinnerbuffets for $3,342. On closer examination, we note that the invoices are the same except that in one se tthere is no separate fee for the 1 9 % service charge, instead the service charges are reflected by th eincreased unit charges.

Page 14 of 15IGOS-OASB June 11,2008


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OFFICE F THE INSPECTORENERALMIAMI-DADEOUNTY UBLIC CH OO LSFinal Report on John A. Ferguson Senior High School Retreats

Between 2003 and 2007 and while serving as principal of Ferguson SH S SeniorHigh School, Dr. Hoecherl personally entered into at least four (4) contracts with resorthotels contrary to SB Rule 6Gx13-3F-1.01, which states in part:

The Board directs that all contracts to which the SchoolBoard is a party be submitted to the Board Attorney fordrafting or approval as to form and to determine if suchcontracts meet all relevant and applicable legalrequirements as to form and legal sufficiency.In an effort to disguise the fact that he personally entered into contracts contrary

to SB rules, Dr. Hoecherl made and/or caused to have made false statements onpurchase ord ers, invoices, and other documentation, related to the 2007, 2006 and 2005events, in order to obtain in excess of $200,000 in MDCPS funds and/or federal grantfunds, which also may be in violation of SB rules. Dr. Hoecherl used MDCPS and/orgrant funds to purchase aicoholic beverages for MDCPS employees and their guestsand/or family members. D r. Hoecherl also used MDCPS and /or grant funds topurchase food for MDCPS em ployees' guests and family members.

Presented within this report are facts surrounding the annual retreats of John A.Ferguson SHS for 2003 to 2007. Copies of this report, as a draft, were presented tocertain individuals and entities for comment. Written responses received by the OIGare included with th e repo rt. See Appendix A for correspondence received on behalf ofMs. Estelle Wild and Appendix B for correspondence received on behalf of Dr. DonaldHoercherl. A draft report was provided to MECA; however, the OIG did not receiveany written comments.

While the OIG continues to be engaged in a joint investigation with the Miarni-Dade State Attorney's Office, it does no t preclude th e MDCPS and/or the SB fromtaking any action deemed warranted in this matter. Furthermore, the OIG recommendsthat the Administration review the enforcement of School Board Rules relating to th eauthorizations and paperw ork (i.e. contracts, engagement letters, invoices, etc.)required to create purchase orders and the submission of invoices and other back-updocumentation fo r the release of payment. Finally, it is recommended that the policiesrelated to vendor performance, or in this case, vendor non-performance also bereviewed and that appropriate action also be considered on this front.

Page 15 of 15IG08-04SB June 11, 2008


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OIGAPPENDIX A

IG08-04SBFinal Report onJohn A. Ferguson Senior High School Retreats


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MARK SEIOENTODD MICHAELS

Of CounselJO E L OENARO

M r , Christopher MazellaI nsp ec to r General19 West Flagler StreetSui te 220Miami, FL 3 3 130

LAW OFFtCE OFMark Seiden

A PROFESSIONAL ASSOClAT IONSuite 400

777 Brickell AvenueMiami, Ftorida 331 31

TELEPHONE (305) 77-4981FACSIMILE (3051577-8376EMAIL [email protected] M . fs trugoLegal Assistant & Of f i ce ManagerMir ta RuanoLegal Assistant

May 1 2 , 2008S e n t Via Cer t i f ied MailReturn Receipt Requested

RE : Estelle WildDear Mr. Mazzella:First, enc losed please find a l e t te r f rom Estelle Wild in w h i c h s h e i nvokes h e r FifthAm endm en t r i gh t to si lence both as a response to t h e repor t produced by your of f i ceand i n general. Please i ns t ruc t your personnel n o t to attempt t o have any furthercontact with her.Second, Ms. Wild disputes the accuracy o f both t h e draft r,eports and the statementsat t r i bu ted to her there in,Last, that said, I would be m os t in terested in si t t ing down w i t h y o u and Ms. Jo r dan (o rany other prosecutors ass igned to th e case) prior t o any decision being made regard ingMs. Wild. For your i n format ion, I w i l l be o u t o f the coun t r y and unavai lable beginningMay 27'h, 2008 and will returil to my o f f i c e on June 16th, 2008. 1 would appreciateyour considerat ion in not taking any action in this matter t h a t involves Ms. W i l d duringthat t ime per iod.I look forward t o hear ing from you a t your convenience.

Sincer ly,

IPJ-M ar k Seidencc: Carol Jordan, AS AEstel le Wild

APPENDIX A


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Estelle Wild - A -& ,,:. . . : . , - , = r ~ r -. , - . , f r ;c!--!8600 SW 12 0 Street !&-::; ,-. , % .; . p,i8 ' '. 8Miami, F L 33156 lfl!lfi>i.Y! A;\ 1 1 : 4

May 13, 2008M r . C h r i s tophe r M aze l laInspector General19 West F lag le r S t ree tSu i t e 220Miami, FL 33130

Sent Via Cer t i f i ed Mai lReturn Receip t Requested

D e a r M r . Mazzel la:On February 22, 2008 my a t to r n e y , M r . M a r k Seiden, w r o t e a l e t te r to Ass is tan t S ta teAt to r ney Caro l J o r d a n with copies to S IA ' s Dylan, Hughes and Kep ler, adv i s ing th a t herepresented me in an i nves t i ga t i on that t h e y were conduct ing which involved E. WildE n t e r t a i n m e n t Inc. Mr.Seiden requested t h a t any inquir ies that t h e y had o f me shouldbe d i rected to him.Desp i t e that request , on Fr iday May gth, S IA Hughes te l ephoned my h o m e anda t t e m p t e d t o c o n t a c t me regard ing the same matter, in v i o l a t i o n of my a t t o r n e y ' sd i rec t i ve .B o t h in response t o t h e r e p or t t h a t w a s del ivered t o m y h om e and just s o there is nof u r the r m i sunde r s t and i ng , I respec t fu l l y decl ine to answer any quest ions posed to meb y you, your agents, pol ice of f icers, detect ives, prosecutors o r any other personi nvo lved i n the i nves t iga t ion on the adv i ce o f counse l and on f u r t he r grounds that toanswer , would v io la te my r ights under t h e Four th, F i f th and Sixth A m endm en ts t o theUn i t ed S t a t es Cons t i t u t i on and t h e corresponding prov i s ions of t h e Flor ida Sta teC o n s ~ i t uion.Direc t a l l further inquir ies to my attorney, Mark Seiden, who i s a vai lab le a t (305) 577-4981. Ptease advise anyone connected w i t h this i n ves t i ga t i on of the foregoingi nvoca t i on of my F i f th A m e n d m e n t rights and advise them n o t t o attempt any fu r thercontact with me.

Sincerely,

Estelle W i ldcc : A S A Carol Jordan

SlSA Stephen Pollock JS IA Dylan HughesS IA Michae l Kep le rMark Seiden, Esq.


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OIG

APPENDIX B

IG08-O4SBFinal Report onJohn A. Ferguson Senior High School Retreats


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M I C H A E L A . R O S E NmjrOm~rosenlaw.cornO F C O U N S E L

K Y M E . BENNETTE, P. A .kabOrnjrosanlaw.com

&IICHXB~L. ROSEN ,.A.A T T O R N E Y A T L A W

GROVE F O R E S T P L A Z A2937 S O U T H W E S f 27TMA V E N U E

SCllTE I 0Mrabrr. F LOR I D A 33 133

TELEPHONE 3 0 5 / 4 4 6 - 6 1 16F A C S I M I L E 3 0 5 / 4 4 6 - 6 1 5 0

Via Facsimile and Mail(305) 579-2656O f f i c e o f he Inspector General19 West Flagler StreetSuite 220Miami, FL 33 130

Ann: Ms. Patra LiuRe: Dr. Donald HoecherlRef. IGOX-04SB

Tk~snkyotl o~p:u:. Ietr - r oFJuue 5 . Lvh:!e 1 a~prec ia te l?e ticsci for deadlines,my involveq~er i t t !i h i ~natrcr has been very brief i j !:uc that do-srrienfs are appended Lo llle OIG draft report. howc:per. rhejdo not reflect the cornplr:~,!or:/ ;~-hir.d his matter. A s I have sadbe fom, Dr . hoe chert.^ exemplary his8)ry\villi the public scl~oul)stem :v:.rsa!rts a review ofa l l records in order to iully, fairly and accon te l? recpondto t l ie allcg;l,tions n tht: Jraftr.epol.t.

Since you wiil r ~ o t gree to withhold the report (which I request be reconsidered), let me statecategorically that Dr. Hoecherl absolutely did nothing wrong - although I believe that he could havefollowed protocol a link better. The distinction between wrcng an d protocol is a huge one: and to becertain, nothingwa s clone or not done by Dr. Hoectlerl that was criminal in an y wav.

I have already called for an appointment to review th e documents in your possession.I look forward to resolving this matter with you in the immediate future.

flay-,ael J. Kosencc: Dr. Donald I-IoecherI

APPENDIX B


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ChristopherR Mazzella[nspecmr GeneralAlan s010wiuDeputy Inspeaor General

Fatra LiukL sta nr InspectorGeneralLegal Counsel

June 5,2008

Mr. Michael J. Rosen, P.A.2937 S .W. 27thAvenue, Suite 102Miami, Florida 33133Via Facsimile to 305-446-6150 (one page only) and U.S. Mail

Re: Dr. Donald Hoecherl, Ref. IGOB-04SBDear Mr. Rosen:I have just received your letter, dated June 4,2008, requesting access tovarious financial documents in order to properly draw a response to theOffice of the Inspector General's (OIG) draft report.While you state that this request is not meant as a delay, it comes at theeleventh hour as you client's current deadline to submit a response is thisFriday, June 6,2008. The OIG previously extended the deadline by twoweeks from May 23rdto June 6 based upon your earlier request.Furthermore, the OIG draf? report is accompanied by thirty-two (32)e x h b i t s susbstantiating th e transactions detailed in the report. Theseinclude the relevant invoices, purchase orders, hotel bills, MDCPS checks,an d correspondences related to the events reference in our report.Your latest request asks the OIG for another's records. Please be advisedthat John A. Ferguson Sr. High School's bank account records reside withthe school regardless of whether th e OIG had access to them. The samegoes for the other procurement and hotel information you requested. Asmentioned earlier, all th e relevant exhibits are attached t o the OIG report.You may set up an appointment to view our file, and we will make all non-exempt materials available for your inspection as required by FIoridaStatutes Ch. 119 . However, the OIGwill not be delaying finalization of hisreport. Please contact me to schedule an appointment to view our file.We look forward to receiving a response on behalf of your client, if he sochooses, by d o s e of business Friday, June 6,2008. If we do no t receive awritten response, we will assume that he elected not to provide one.

Yours trulv.

Patra LiuAssistant inspector General


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M r c w ~. ram^, P.A.GROVE FOREST PLAZA SUITE 1012937 SOUTIWEST27M AVBNUEMIAMI, LORIDA3 133

June 4,2008

Via Facsimile (305,579.2656)and USPSPatra Liu,Assistant Inspector Genera!Miami-Dade County Public SchoolsOffice of the Inspector Generat19 West Flagler Street, Suite 220Miami, Florida 33130

Re: Dr. Donald HoecherlDear Ms. Liu; I

Thank you for your letter of May 23rd. I have been working diligently toward aresponse to the allegations in this case. Before putting anything in writing, I am requestin!$access to th e following financialdocuments:

John A. Fergusan Sr.High School ("JAF")Special Purposes Account; JAF School Bank Account;

All purchase orders, with approval chain, for the activities in question;All financial records and correspondence sent by the hotels in question.The OIG has had access to them. In order to properly draw a response, Dr.Hoecherineeds to be able to see and review same. I am happy to arrange a meeting in your o f f ~ c ~ l(or wherever the files are located) or to have a copy made of the relevantdocuments forour review.

This is notmeant as a.delay. Iwant us to be n the position to answer and put fortl-a response to your inquiries.

I want to express o youmy belief thatwhen we look at substance over form, whichin this case is absolutely critical, you will agree that Dr. Haecherl's conduct was; if noI:beyond reproach, certainly neither ill intended nor something that I ruly believe cannot bereasonablyresolved between us.


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- U D l U P l U U d L3: EU PAL\ JUb44Ub lY f . J L A W UFF!CES

Patra Liu, Assistant InspectorGeneralJune 4,2008Page 2

Can .you advise if your office is in possession of the financial recards of J o h ~Ferguson bn i o r High School, or are they in custody of th e StateAttorney's oftice.1 lock forward to your response.

Very t p l y yours, 7

Michael J. RosenMJR:plrncc: Dr. Donald Hoecherl (via email)Carol Jordan, Esq. (via ernail and USPS)~h r i s t o p h e rMazzella, InspectorGeneral (via ernail and USPS)

' Joseph Centerino, ASA (via email and USPS)


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ChristopherR.Mazzellalnspecmr GeneralAlan SolowitzDeputy LnspectorGeneralPatra Liu

Assistant Znspecbor GeneralLegal Counsel May 23,2008

Michael J. Rosen, P.A.Attorneys at LawGrove Forest PIaza, Suite 1012937 Southwest 27'hAvenueMiami, FL 33 133Facsimile: (305) 446-6150 and U.S. MailRe: Dr. Donald Hoecherl, IG08-04SBDear Mr. Rosen,The Miami-Dade Office of the Inspector General (OiG) is in receipt of yourletter dated May 21, 2008, wherein you request a two week extension fromMay 23, 2008 to provide a written response to the OIG's draR report. Byway of this letter, your request is granted. W e look forward to receiving aresponse from, or on behalf of, Dr. Hoccherl on or before June 6,2008.Sincerely,-atra LiuAssistant Inspector GeneralMiami-Dade County Public Schools


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LAW OFFICES

KYM E. BENNETTB, P.AC [email protected]

MICEAEL. ROSEN,P.A.GROVE FOREST PLAZA SUlTE 1012937 SOUTHWEST27n AVENUEMIAMI,FLORIDA3 133

TELEPHONE (3 !15)446-6116FAX 3 35) 446-6150

May 21,2008

Via Electronic Mail and FacsimileChristopher R. Mazzelia, Inspector GeneralMiami-Dade County Public SchoolsOffice of the Inspector [email protected]@dadeschools.netFacsimile: 305.579.2656

Re: Dr. Donald HoecherlDear Mr. Mazzella:

I am in receiptof your May 9,2008etter and accompanying report, hand-deliveredto Dr. Hoecherl. I note the deadline to respond is May 23". This firm has been retainedto represent Dr. Hoecherl in both the State Attorney matter and the investigation by thtz01G.We are in the process of arranging to review documents in addition to thost;provided by your office. While I would like the opportunity to respond to your letter, theMay 23fddeadline is simply impossible without first reviewing relevant documents. I am1requesting theopportunityof a few additionalweeks to respond. This may well include ;dneed to meet with the State Attorney's office in advance of responding to your letter,I look forward to hearing from you.

Very truly yours,

Michael J. RosenMJR:plmcc: Dr. DonaldHoecherf (via email)Jeffrey Feldman, Esq. (via email)

Ferguson High

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Transcript of Ferguson High