Conroe ISD’s Fraudulent $807 million bond package: $21,562.50, Part One of Five Lies and Threats

Conroe ISD’s Fraudulent $807 million bond package: $21,562.50, Part One of Five Lies and Threats

Conroe, March 23 – “$21,562.50” is the single fact which symbolizes the fundamental problem with the Conroe Independent School District’s (CISD) $807 million bond proposed set for voter referendum on May 4, 2019. That’s right, $21,562.50.

If you examine the supposed expense calculation backup on CISD’s bond advocacy website, http://bond.conroeisd.net/wp-content/uploads/sites/3/2019/02/P1-P2-P3.pdf, you find a 50-page spreadsheet (the “Expense List”) supposedly providing the backup to CISD’s massive bond and tax hike wish list. CISD has admitted, however, that the school district has received no estimates, proposals, or bids to back up the bond estimates. CISD’s Superintendent Curtis Null again admitted that point to the Woodlands Township Board of Directors during a presentation on Thursday, March 21, 2019, when Township Director Ann Snyder specifically asked Null a question about that fact.

In an effort to study CISD’s $807 million bond proposal, this newspaper conducted a detailed analysis of the 50-page spreadsheet (the “Expense List”) and made a stunning discovery: $21,562.50 is a cost estimate number which appears 117 times and it is NOT for the same type of item recurring frequently. For example, CISD has estimated the cost of the following:

  • Waterproofing at Armstrong Elementary, $21,562.50;
  • Installing additional fencing at Bush Elementary, $21,562.50;
  • Adding lightning protection at the Caney Creek High School Auditorium, $21,562.50.

$21,562.50 appears as an estimate for a wide variety of cost items 117 times. If one moves the decimal for that number, however, here’s what else one finds:

  • $21,562.50 appears as a cost estimate on CISD’s Expense List 117 times;
  • $2,156.25 appears as a cost estimate on CISD’s Expense List 29 times;
  • $215,625.00 appears as a cost estimate on CISD’s Expense List 12 times; and
  • $215.63 appears as a cost estimate on CISD’s Expense List 4 times.

The “21,562.50” group of bogus cost items comprise $5,173,706.27 in bogus cost estimates.

Now, let’s be very clear. As of Monday, March 18, 2019, Sarah Blakelock, CISD’s Spokesperson, told this newspaper in writing that CISD didn’t know the significance of those recurring numbers.

CISD’s Expense List includes other interesting cost estimates:

  • $7,187.50 appears as a cost estimate on CISD’s Expense List 92 times;
  • $53,906.25 appears as a cost estimate on CISD’s Expense List 12 times;
  • $28,750.00 appears as a cost estimate on CISD’s Expense List 67 times;
  • $14,375.00 appears as a cost estimate on CISD’s Expense List 68 times;
  • $1,437.50 appears as a cost estimate on CISD’s Expense List 15 times.

Those additional cost estimates total $4,233,137.50.

A page from CISD’s Expense List showing the recurrence of “21,562.50.”

Fraud and Benford’s Law

In internal auditing and false claims litigation, both under federal law and Texas law, one of the five major signs of fraud is the recurrence of numbers which appear random at first glance. Such recurrence indicates an effort by the originator to make the cost charges or estimates look genuine by making the dollar amounts look complex and uneven.

In statistics, there is a principle known as Benford’s Law, which holds “When numbers appear more often than they should, that’s a red flag that you have a questionable invoice or expense list in front of you.”

The circumstances with CISD’s $807 million bond proposal and the fake numbers contained in the Expense List are particularly egregious.

Blakelock, CISD General Counsel Carrie Galatas, and Null have all admitted that there are no actual bids, proposals, quotes, or even outside estimates for any of the numbers.

Instead, CISD has presented a group of cost estimates on the Expense List which they clearly intended to look as though precise estimates and calculations comprise their basis.

CISD’s Expense List is a classic example of a fraudulent expense list under Benford’s Law. For the more mathematically inclined, the full numerical exposition of Benford’s Law follows:

Benford’s Law to detect fraudulent invoices or expense lists.

CISD’s fraud and deceit gets worse

When Woodlands Township Director Snyder asked Null about the strange recurrence of the numbers, including $21,562.50, Null provided an answer. His answer actually reveals that CISD is more deceitful than it appears at first blush.

Null’s answer to Snyder’s question and the serious problems with it will be the subject of the next article in this series which will run at midnight on Saturday night, March 24, 2019.

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