hisd procurement audit

Dr. Terry Grier, Superintendent of the Houston Independent School District (HISD),

asked the Council of the Great City Schools (CGCS)1 to provide a high-level management

review of the school system‘s Procurement Services Department.2 Specifically, he requested

that the Council—

Review and evaluate the organization, leadership and management, and operations of

the district‘s Procurement Services Department.

Develop recommendations that would help the department achieve greater

operational efficiencies and effectiveness.

In response to this request, the Council assembled a Strategic Support Team of senior

procurement managers with extensive experience in other major city school systems across

the country. The team was composed of the following individuals. (Appendix A provides

brief biographical sketches of team members.)

Robert Carlson, Project Director

Director, Management Services

Council of the Great City Schools

David Koch, Principal Investigator Chief Administrative Officer (Retired)

Los Angeles Unified School District

Joseph A. Gomez

Assistant Superintendent, Procurement Management Services (retired)

Miami-Dade County Schools

Arthur S. Hanby, Jr.

Strategic Sourcing and Contracts Officer

San Diego Unified School District

1 The Council has conducted over 200 instructional, management, and operational reviews in more than 50 big-

city school districts over the last 12 years. The reports generated by these reviews are often critical, but they

also have been the foundation for improving the operations, organization, instruction, and management of many

urban school systems nationally. In other cases, the reports are complimentary and form the basis for

identifying ―best practices‖ for other urban school systems to replicate. (Attachment E lists the reviews that the

Council has conducted.) 2 The Council previously conducted a review of the HISD Facilities Services department in May 2010, its

Capital Facilities program in July 2010, and its Information Technology department in January of 2011. This

procurement review does not constitute a forensic audit but instead is a high-level review of department

operations.

Review of the Procurement Services Department

of the Houston Independent School District

October 2011

Review of the Procurement Services Department of the Houston Independent School District


Duane Johnson

Chief Procurement Officer

Los Angeles Unified School District

Christopher Steele

Senior Director, Purchases & Supply

Norfolk Public Schools

The Council‘s team conducted fieldwork for the project during a four-day site visit to

Houston on October 9-12, 2011. The general schedule for the site visit is described below. (A

more detailed working agenda for the site visit is presented in Appendix B.) The team met with the Houston superintendent, chief financial officer, chief of staff,

controller, and interim general manager of procurement services on the first day of the site

visit to discuss expectations and objectives for the review and to make final adjustments to

the work schedule. The superintendent described his concerns about the district‘s

procurement function and identified areas where he wanted the team to focus its attention.

The team used the first two full days of the site visit to interview staff members and

review documents, reports, and data provided by the district. (Lists of individuals

interviewed and materials reviewed by the team are presented in Appendices C and D.)3 The

final day of the visit was devoted to synthesizing and refining the team‘s findings and

recommendations, and debriefing the superintendent, chief financial officer, chief operating

officer, chief of staff, and controller.

The Council sent a draft of this report to team members for their review to ensure its

accuracy and to obtain their concurrence with the final recommendations. This management

letter contains the findings and recommendations designed by the team to help improve

operational efficiencies and effectiveness of the Houston school district‘s procurement

services department.

The Houston Independent School District

Procurement Services Department

The Houston Independent School District is the largest public school system in Texas

and the seventh-largest in the United States. The school district operates 296 schools with

approximately 202,000 students, who are supported by almost 30,000 full- and part-time

employees. The General Fund operating budget amounts to approximately $1.6 billion

annually. The capital-facilities program of the district--included in the Capital Renovation

Fund--amounts to almost $1.1 billion with over $800 million from a 2007 bond issue, about

$150 million from ―pay-as-you-go‖ programs, and about $100 million from other capital

sources.

3 The Council‘s peer reviews are based on interviews of staff and others, a review of materials provided by the

district, observations of operations, and the teams‘ professional judgment. In conducting interviews the teams

must rely on the willingness of those interviewed to be factual and forthcoming, but cannot always judge the

accuracy of statements made by interviewees.



The district is led by the superintendent of schools who reports to a nine member

elected board of education. The superintendent has ten direct line reports as shown in the

HISD Organization Chart – August 2011 (Exhibit 1 below) and three staff positions (chief of

staff, E-rate compliance officer, and general counsel).

Exhibit 1. HISD Organization Chart – August 2011

Source: Prepared by CGCS based on information provided by the HISD

The Procurement Services Department is headed by a General Manager who reports

directly to the Chief Financial Officer (CFO). As shown in the Procurement Services

Department Organization Chart–December 2011 (Exhibit 2 below), the Procurement

Services General Manager has seven direct reports, who are classified as Procurement

Managers.

In addition, five staff positions including the Web Content Administrator, Web

Designer, Customer Service Coordinator, Procurement Coordinator, and Team Leader for

Business Operations report to the General Manager.

Superintendent

of Schools

Chief

Communications

Chief Major

Projects

Officer

Chief Elementary

Schools

Staff Positions (3)

Chief Human

Resources

Chief Academic

Officer

Chief Financial

Officer

Chief Operating

Officer

Chief Middle

Schools

Chief Technology

Officer

Chief High

Schools



Exhibit 2. Procurement Services Department Organization Chart –

December 2011

Source: Prepared by CGCS based on information provided by the HISD

The Procurement Services Department has an Operating Budget of $1.9 million annually.

The department‘s operating budget and actual expenditures for the current and two prior

years are displayed below in Exhibit 3.

Exhibit 3. Procurement Services’ Operating Budget and Actual Expenditures

2010-2012

Object of

Expenditure

2010

Budget

2010

Actual

2011

Budget

2011

Actual

2012

Budget

Salaries and

Benefits

$1,814,041 $1,738,788 $1,823,105 $1,750,460 $1,699,502

Contracted Services 124,167 89,049 109,828 67,449 104,500

Supplies 28,000 24,902 30,650 22,976 42,847

Equipment 12,518 11,440 43,000 32,304 2,772

Professional

Services

5,000 0

3,500 3,000 3,500

Other 18,850 19,078 15,952 10,158 16,201

Totals $2,002,576 $1,883,257 $2,026,035 $1,886,527 $1,869,322 Source: Prepared by CGCS based on information provided by the HISD

The Procurement Services Department processed about 130,000 purchase-requisitions

amounting to more than one-half million line items during the 2010-11 fiscal year. The

department also launched 163 Requests for Proposal (RFP) during that fiscal year.

Procurement Services

General Manager

Procurement

Manager

PROCARD

Procurement

Manager

Technology

Procurement

Manager

Transportation/Maint

Procurement

Manager

Office Furniture

Procurement

Manager

Instructional

Procurement Manager

Construction

Procurement

Manager

Food Service

Staff

Positions (5)

Chief Financial

Officer



HISD reported that its total non-salary ―spend amount‖ as $530 million, of which 12

percent, or $65 million, was devoted to businesses identified as minority and women-owned

business enterprises (M/WBE). The district identified 30 percent, or $158 million, of its

spending to be with vendors within HISD‘s geographic boundaries. The dollars spent against

existing contracts were identified as amounting to 36 percent, or $193 million. In addition,

the district has issued almost 950 purchasing cards (Pro-Cards), which accounted for over

100,000 transactions and about $30 million in spending in fiscal year 2011. The department

also processed 1,300 travel requisitions amounting to almost $500,000 in that fiscal year.

Findings and Observations

The Council‘s Strategic Support Team‘s findings and observations are organized

around four general areas or themes: Commendations, Leadership and Management,

Organization, and Operations.

Commendations

The Chief Financial Officer recently appointed an Interim General Manager of

Procurement Services who is experienced, competent, and motivated to make positive

changes in the organization.

In the past two years, the district has made substantial improvements in its application

and execution of E-Rate grants.

The district appears to have an aggressive program to attract and engage small,

minority and women owned business enterprises (M/WBE) as HISD vendors.

Staff members of the Procurement Services department appeared to be competent and

focused.

Leadership and Management

The majority of the district‘s purchasing, which is based on Requests for Proposals

(RFPs), is awarded based on a number of weighted factors that are not always

transparent or consistently applied; are often under-value ―price‖ as a selection

criterion; and lead to a perception of manipulation of and distrust in the procurement

process. For example –

o The weighting of various factors for evaluating RFPs is not disclosed in most

RFPs (the exception being RFPs for construction contracts).

o The weighting of evaluation factors is not done until after the issuance of the RFP

and may be done as late as during the vendor-selection phase of the RFP process.

o RFP evaluation factors vary between RFPs, and there are instances where the

factors change during the RFP process (i.e., a different set of evaluation criteria

are published with the solicitation than are actually used in the vendor selection).



o ―Price‖ as an evaluation factor is generally weighted at about 50 percent in the

RFP processes with--

Some RFPs weighing ―price‖ at as little as 12.5 percent.

Food Service RFPs valuing ―price‖ at 25 percent or less.4

While significant purchasing authority has been delegated to schools under the

district‘s decentralization model, there has not been any analyses of the cost-benefits

of centralized vs. decentralized procurement processes and there has been limited

administrative oversight of school-based procurement processes.

The low dollar thresholds that have been established for the district‘s purchasing

methods are not aligned with best practices and restrict efficiency. For example--

o The threshold for the formal bidding (or RFP) process has been set at $10,000.

(Texas law allows districts to set this threshold at $50,000.)

o The district limits Pro-Card transactions to a maximum of $500 for an individual

purchase and $5,000 per month on an individual card.

The Best Practice Group reported by RPMG Research Corporation-2010

Purchasing Card Benchmark Survey Results-cited an average single

transaction spending limit of $3,266 and an average spending limit per month

of $11,578.

A 2010 Council of the Great City Schools survey indicated that the median

purchasing-card single transaction maximum among reporting districts was

$1,000.

o The $500 threshold of tagging and tracking of assets, which creates additional

administrative work, is not justified based on the cost of the asset.

o No dollar-value minimum has been established for purchase requisitions resulting

in unnecessary time and effort being expended on low-value transactions.

The district requires that the execution of contracts and agreements exceeding

$50,000 be vetted by the General Counsel with funding verified by the Finance

Department, presented by the Superintendent, and approved by the Board of

Education. This ineffective and time-consuming process requires the signatures of the

following high-level officials—

o The President of the Board

o The Board Secretary

4 Construction RFPs value ―price‖ at the highest levels, ranging between 55 percent and 100 percent in the

evaluation process.



o The Superintendent

o The General Counsel

o The Chief Financial Officer

The General Manager of Procurement Services has no delegated authority to execute

contracts at any dollar level.

The purchasing work of the district is highly transactional and makes minimal use of

strategic sourcing, cooperative contracts, master contracts, and blanket purchase

orders as cost-effective alternatives to the district‘s repetitive bidding, RFP, and

contracting procurement processes.

o As seen in Exhibit 4 below, the Council‘s team found that--

One third of the purchase orders processed were for $500 or less.

86 percent of purchase orders processed were for less than $5,000.

Only 1 percent of purchase orders processed were for $50,000 or more

Exhibit 4. Purchase Order Processed by Dollar Value, 2010-11

Purchase Order

Value

Total

Dollars

Percent of

Total Dollars

Number of

Purchase

Orders

Percent of Total

POs

Up to $500 $3,317,164 2% 14,077 33%

$500-$2,500 21,761,004 11% 17,639 42%

$2,500-$5,000 16,630,029 9% 4,738 11%

$5,000-$10,000 18,823,870 10% 2,692 6%

$10,000-$25,000 30,656,515 16% 1,940 5%

$25,000-$ 50,000 24,562,811 13% 687 2%

$50,000 or More 79,157,857 41% 485 1%

Totals $194,909,252 100% 42,258 100%

Prepared by CGCS based on data provided by HISD

Senior financial management of the district is individually reviewing thousands of

contracts each year, many of which are for low dollar amounts.

The team was told that the General Counsel‘s office reviews all consultant contracts,

regardless of value, a process that can take 60 to 90 days to complete.



Approximately $10 million of expenditures are never processed through an adopted

procurement method. For example –

o About $5 million is expended on direct payments to vendors (payments for

transactions without purchase orders or contracts) outside of the normal

procurement processes.

o $4.3 million of expenditures for school-based consultants and after-school

programs are routed through the General Counsel‘s office without going through

the procurement office.

There appears to be an overall lack of planning within the procurement department.

For example –

o The Procurement Services department has no strategic or business plan outlining

its future direction, and process improvements appear to take place on an ―ad hoc‖

basis.

o While an annual procurement calendar exists, it is incomplete and apparently not

utilized.

o Buyers appear to use an excessive number of temporary-contract extensions

because bids and RFPs are not completed on a timely basis.

The team encountered a number of situations that suggested poor communications,

inadequate coordination, or outright conflicts between Procurement Services

personnel and administrators in other functional units. For example –

o End users of Procurement Services indicated that often they are not involved in

selecting the procurement methodology that will be used for a particular contract,

e.g., selecting a large number of awardees for a small volume contract.

o End users complained that they are not frequently involved in the review of final

terms and conditions of the contracts and only learn of them after the contracts are

finalized.

o The team was told that some buyers project an adversarial attitude and do not

view themselves as part of a total team effort by the district.

o Some customers indicated that poor communications between buyers in the

Information Technology (IT) and Procurement Services units creates obstacles to

efficiency.

The team requested, but did not receive, copies of internal audits of Procurement

Services operations from the Office of the Inspector General.

There is no formalized professional-development program for Procurement Services

employees. In addition –



o While the district acknowledges the importance of certification, it has not been

aggressive in requiring staff certification and/or underwriting some portion of the

costs to encourage professional development for procurement services employees.

o Some long-time buyers and senior buyers do not have public sector professional

certification.

o Some procurement managers have not obtained public sector managerial

professional certification.

The training of school-based and central-office staff in procurement processes and

automated procurement systems is inadequate. For example –

o The team was advised that training is conducted primarily by IT personnel with

little participation by Purchasing Services staff.

o SAP training conferences are not attended by functional power users.

o Principals indicated that webinar training is insufficient and that purchasing issues

and methodologies are not adequately covered.

Organization

The organizational placement of Procurement Services (reporting to the Chief

Financial Officer) does not maximize potential efficiencies or contribute to the

internal control principle of separation of responsibilities. For example –

o The financial part of an organization is frequently focused on controls, whereas

the operations portion is more often focused on customer service and productivity.

o Principles of internal controls would suggest separating budget authorization and

vendor payments from vendor soliciting and contracting.

Operations

The district‘s investment in its Enterprise Resource Planning (ERP) system has not

been optimized to enhance procurement processes. For example –

o The functionality allowing supporting documents to be attached to requisitions is

not being utilized.

o The automated purchase-order faxing functionality has not been acquired,

configured, and operationalized by the district thereby causing staff to manually

fax purchase orders to vendors.

o The ability to make payments to multiple-street addresses for the same vendor

name has not been operationalized.



o It was unclear to the team whether the tracking function in SAP is being used

effectively to ensure purchase orders do not exceed the school board approved

contract limits.

The team was advised that procurement policies and procedures had not been updated

in over two years, leading to confusion and miscommunications. For example –

o It was reported that different buyers provide conflicting information and use

different procedures.

o Some communications from buyers appear to be based on past practice rather than

adopted procedures.

Roles, responsibilities, and processes have not been clearly defined between

procurement and end users as it relates to negotiations with vendors and with contract

administration.

The team noted these additional concerns related to the district‘s contracting

processes –

o There does not seem to be clearly defined criteria regarding when to renew or

rebid an existing contract.

o Research of product markets is not consistently conducted by staff members prior

to renewal or awarding of a contract.

o The RFP process, rather than a straight bid (Invitation to Bid), is used for routine

purchasing of standard, off-the-shelf commodities.

o The district submits annual contract renewals to the school board for approval,

even though they have board-approved multi-year agreements.

o The total-cost-of–ownership is not always built into the RFP evaluation and

selection processes.

o Standardized form contracts are reviewed by the General Counsel‘s office.

o Many vendors reportedly find it difficult to do business with the district due to the

size of the solicitations (up to 150 pages).

Vendor protest policies are not incorporated in solicitation documents nor are they

posted on the procurement web site, and procedures to be followed are not well

understood.

The rotation of contract work among multi-award vendors is reportedly not being

done on a consistent basis.

The process for emergency orders is reported to take up to five days, making it

ineffective in meeting district needs.



Although federal certification documents are included in RFPs and bid solicitations,

staff is not checking for excluded parties listed in the federal Excluded Parties List

System (EPLS) web site, as required by law for certain contracts and purchases over

$25,000.

The Procurement Services department has not monitored, measured, or documented

vendor performance.

The team noted that several links on the Procurement Services website are not active

and some information is not current.

Procurement Services does not rotate the commodity assignments of buyers on a

regular basis.

The district has held only one vendor fair in the past two and one-half years.

There are deficiencies in the operation of the travel desk, including the following–

o The district does not collect credits, points, or miles for air or hotel expenses.

o The district writes checks for hotel expenses, rather than using Pro-Card or

electronic payments.

o Air fare and hotel expenses are often paid in advance, rather than encouraging

employees to apply for reimbursement.

o The timing of travel-desk processing results in the loss of ‗early-bird‘ discounts.

Recommendations

1. Change the reporting relationship of the Procurement Services Department to the Chief

Operating Officer.

2. Initiate a nationwide search for a Procurement Services General Manager, preferably

having a Certified Public Purchasing Officer (CPPO), Certified Purchasing Manager

(C.P.M.), or equivalent designation.

3. Restructure the district‘s procurement contracting processes to –

a. Increase the use of strategic sourcing, cooperative contracts, master contracts, and

blanket purchase orders.

b. Increase the use of straight bidding with detailed specifications.

c. When using weighted RFPs -

i. Provide full disclosure in solicitation documents of the evaluation criteria and the

weights given to each factor in advance



ii. Use the same weighting factors in the evaluation process as disclosed in the

solicitation documents

iii. Provide substantially higher value to ―price‖ as a weighted factor.

d. Establish standard consultant and professional services contracts to provide for an

expedited contract-review process within the Procurement Services Department. e. Eliminate the use of temporary contract extensions by conducting bids and RFPs on a

timely basis

f. Publicize and communicate the vendor-appeal process.

g. Provide a monthly report to the Board of Education detailing the district‘s non-salary

―spend‖ amounts by category.

4. Conduct a cost/benefit analysis of centralized vs. decentralized procurement processes.

5. Establish appropriate standards and oversight for school-site based procurement

processes.

6. Increase dollar-value thresholds for purchasing processes as follows –

a. Increase the formal bidding (or RFP) threshold to the state-allowed limit of $50,000. b. Increase the single transaction limit on the district Pro-Card from the current level of

$500 to an amount more reflective of industry best practices.

c. Increase the threshold for the tagging and tracking of assets from the current level of

$500.

d. Establish a minimum dollar amount for purchase requisitions.

7. Eliminate inefficient and cumbersome contract signature processes and delegate signature

authority for board approved contracts, as well as contracts below the board approval

threshold, to the General Manager of Procurement Services. 8. Significantly reduce the number of direct-payment transactions constituting purchases

that are not processed through the Procurement Services Department.

9. Establish a strategic-business plan for the Procurement Services Department that is linked

to the district‘s strategic plan and contains goals, objectives, timelines, performance

measures, and accountabilities.

10. Review and update procurement master calendars for each unit within the department and

establish a monitoring and reporting component.

11. Improve communications and coordination with end users through their timely

involvement in the contracting process.



12. Ensure that internal audits are conducted of Procurement Services operations on a regular

basis and make the resulting reports available to the School Board, administration, and

the public.

13. Establish a formalized professional development program5 for staff members of the

department and encourage buyers and managers to become certified by the Texas

Association of School Business Officials, the Universal Public Purchasing Certification

Council, or The Institute of Supply Management.

14. Enhance the SAP Supplier Relationship Management (SRM) system training.

15. Enhance the functionality of the SAP SRM system by incorporating –

a. Comprehensive budget checking and expenditure control capabilities.

b. The attachment of documents to requisitions by requesters

c. Automated faxing capability.

16. Update and post on the department‘s web site all procurement policies and procedures,

including--

a. The roles and responsibilities of both Procurement Services and end users in the

solicitation, negotiation, creation, and administration of contracts

b. Clearly defined criteria on when to renew and rebid existing contracts

c. Requirements for researching product markets prior to major solicitations

d. Total-cost-of–ownership in evaluations and selection processes.

e. How work on multi-vendor contracts will be distributed.

f. A revised emergency procurement procedure that can address urgent situations.

g. Processes that monitor, measure, and document vendor performance.

17. Establish procedures to ensure compliance with federal requirements on the Excluded

Parties List System (EPLS). 18. Periodically rotate the commodity assignments of buyers in the Procurement Services

department.

19. Establish a regular schedule of vendor fairs.

20. Improve the operational efficiency of the travel desk by –

5 Two and three day professional development courses are available from the National Association of

Governmental Purchasing (NAGP), including Introduction to Public Purchasing, Sourcing in the Public Sector,

Developing and Managing RFPs, Contract Administration, and Legal Aspect of Purchasing.



a. Performing a cost-benefit analysis to determine the financial and operational

effectiveness of staffing this function vs. self-purchasing of travel tickets by staff

upon approval of a travel request

b. Encouraging employees to request travel reimbursement (rather than advance

payment) by expediting reimbursements c. Paying hotel bills by Pro-Card or other electronic means rather than checks

d. Considering the use of ―declining balance‖ debit cards for travel expenses

e. Developing a process to capture credits, points, and miles available for air and hotel

expenditures.



Appendix A. STRATEGIC SUPPORT TEAM

Robert Carlson

Robert Carlson is Director of Management Services for the Council of the Great City

Schools. In that capacity, he provides Strategic Support Teams and manages operational

reviews for superintendents and senior managers; convenes annual meetings of Chief

Financial Officers, Chief Operating Officers, Transportation Directors, and Chief

Information Officers and Technology Directors; fields hundreds of requests for management

information; and has developed and maintains a Web-based management library. Prior to

joining the Council, Dr. Carlson was an executive assistant in the Office of the

Superintendent of the District of Columbia Public Schools. He holds master and doctorate

degrees in administration from The Catholic University of America; a B.A. degree in

political science from Ohio Wesleyan University; and has done advanced graduate work in

political science at Syracuse University and the State Universities of New York.

David W. Koch

David Koch is the former Chief Administrative Officer for the Los Angeles Unified School

District (LAUSD). The LAUSD is the nation‘s second largest public school system, with

more than 700,000 students in grades K-12, an annual budget of more than $9 billion, and

more than 80,000 full- and part-time employees. Mr. Koch‘s responsibilities encompassed

virtually all non-instructional operations of the district, including finance, facilities,

information technology, and all of the business functions. Mr. Koch also served the LAUSD

as business manager, executive director of information services, and deputy controller. Mr.

Koch was also business manager for the Kansas City, Missouri Public School District and

was with Arthur Young and Company prior to entering public service. He is a graduate of

the University of Missouri and a Certified Public Accountant in the states of California,

Missouri, and Kansas. Currently a resident of Long Beach, California, Mr. Koch provides

consulting services to public sector clients and companies doing business with public sector

agencies.

Joseph A. Gomez

Joseph A. Gomez is the former Assistant Superintendent of Procurement Management

Services of the Miami-Dade County School Board, Florida. The Miami-Dade County school

district is the 4th

largest in the nation, with over 345,000 students, and over 45,000 full-time

and part-time employees. The annual budget is over $5 billion. His responsibilities included

the supervision of Procurement Management, Stores and Mail Distribution, Surplus Property,

Maintenance Materials Management, Materials Testing department, Furniture Fixtures and

Equipment and Textbook Services. Mr. Gomez is a certified CPM, APP, CPPO, CPPB, and

has 35 years of experience in procurement and materials management. He has a B.A. in

Business Administration, and completed the Executive Development Program at Florida

International University



Arthur S. Hanby, Jr.

Arthur Hanby is the Strategic Sourcing and Contracts Officer for the San Diego Unified

School District (SDUSD). SDUSD is the second largest district in California and serves over

130,000 students with over 250 educational facilities. He is responsible for the district‘s

entire procurement and contracting functions, including contracting for commodities,

equipment, professional, construction and non-construction services; and for the operations

of the district‘s PeopleSoft ERP Financial System eProcurement, Purchasing, eSupplier

Connection, Supplier Contracts Management and ancillary modules. Prior to working at

SDUSD, Mr. Hanby was the Deputy Chief Contracting Officer and Executive Director for

the Detroit Public Schools and the Director of Purchasing and Warehousing for The School

Board of Broward County in Fort Lauderdale, Florida. Mr. Hanby has a Bachelor‘s Degree

from the University of Delaware and a Master‘s Degree in Business Management from

Central Michigan University. He is both a Certified Public Purchasing Officer (CPPO) and

Certified Professional Public Buyer (CPPB), and holds Lifetime certification as both a

Certified Purchasing Manager (C.P.M.) and Accredited Purchasing Practitioner (A.P.P.). Mr.

Hanby is a member of the National Institute of Governmental Purchasing, and also a member

of the U.S. Communities Government Purchasing Alliance Advisory Board, appointed

jointly by the California Association of School Business Officials (CASBO) and the

California School Boards Association (CSBA), and previously by the National Institute of

Governmental Purchasing (NIGP). He has served as a member of the NIGP Research

Committee and the Purchasing and Supply Management Committee of ASBO International.

Mr. Hanby was a Qualified Examiner for the Universal Public Purchasing Certification

Council, which certifies public purchasing professionals. In 2009, he was elected to the

Board of Directors of the Public Sector User Group (PSUG), an organization of public sector

entities, including K-12 school districts, which use Oracle Corporation‘s ERP applications

software. He has been a frequent public speaker at PeopleSoft/Oracle conferences about its

eProcurement systems and is often sought for his forward-thinking in eprocurement

technology. He is a recipient of the U.S. Department of Commerce Public Service Award.

Duane Johnson

Duane Johnson is the Chief Procurement Officer (CPO) for the Los Angeles Unified School

District (LAUSD). Johnson was named the CPO of LAUSD on May 16, 2005, and assumed

responsibility for Purchasing, Contract Administration, Strategic Sourcing, Materiel

Management, Policy Procedure & Compliance, Vendor Management, Truck Operations,

Document Reproduction, and Mail Unit. He began his career with LAUSD as the Director of

Contract Administration in July, 2001. His previous experience consists of over twenty years

in public sector socio-economic programs and government contracting specifically in Public

Transportation. He began his career as an Equal Opportunity Analyst for minority business

wherein he developed strategies to promote utilization of minority contractors increasing

minority business participation in transportation projects to unprecedented percentages. In

1983, he was promoted to the position of Contract Administrator and began to assume

increasing responsibility in contracting activity. This included substantial involvement in the

design and construction of the Los Angeles underground subway system leading to his

subsequent appointment to Director of Contracts. He joined public education in 2001 and

transformed the procurement practices of the second largest school district in the nation.

Johnson earned a masters degree in public education from California State University–



Dominguez Hills, Carson, CA. and a bachelors of arts degree from Dominican College,

Racine, WI. He also attended Northrop University School of Law.

Christopher P. Steele

Christopher Steele is the Senior Director, Purchases & Supply for Norfolk Public Schools,

Virginia. Mr. Steele has over 30 years‘ experience in operational supply chain logistics,

financial management, facility management and acquisition contracting with both the public

(federal, state, and K-12) and private sector. Mr. Steele holds a master‘s degree in

engineering and business from the University of Kansas, a master‘s degree in human

resource management from Pepperdine University, and a B.S. degree in chemistry from

Pennsylvania State University. Mr. Steele is a Certified Purchasing Manager (C.P.M.),

Certified Purchasing Card Professional (CPCP), Certified Management Accountant (CMA),

Certified Professional Public Buyer (CPPB) and he attained the highest certification level in

the federal Acquisition Professional Corps. Mr. Steele is a member of the National Institute

of Governmental Purchasing K12 Leadership Team and the Council of Great City Schools

KPI Procurement Team,



Appendix B. WORKING AGENDA

Strategic Support/Peer Review Team Procurement Operations

Houston Independent School District October 9-12, 2011

Contacts: Melinda Garrett

Chief Financial Officer Email: [email protected]

Sunday, October 9 Team Arrival 6:30 p.m. Dinner Meeting Melinda Garrett

Chief Financial Officer Leo Bobadilla

Chief Operating Officer Michele Pola

Chief of Staff

Others Ken Huewitt Rick Coulter

Monday, October 10

7:00 - 8:00 a.m. Continental Breakfast Rick Coulter

Interim General Manager of Procurement 8:15 - 9:15 a.m. Team Interviews Enriqueta Berruete

Team Leader, Business Operations Antoinette Lewis Procurement Coordinator

Jarry Wilson Customer Service Coordinator Adam Arbour

Web Content Administrator Jason Washington

Website Designer 9:30 - 10:30 a.m. Team Interviews Guy Mazzola

Procurement Manager Ethel Kujimiyo

Document Control Administrator Amiri Scott

Vendor Master Specialist 10:45 - 12:00 p.m. Team Interviews Elvis Eaglin

Procurement Manager, Construction

12:00 - 1:00 p.m. Working Luncheon

1:00 - 2:00 p.m. Team Interviews Chalita Cyprian

Procurement Systems Manager Donna Aron

PROCARD Administrator Patricia Griggs

PROCARD Administrator



Tara Haire

Travel Specialist 2:15 - 3:15 p.m. Team Interviews Cesar Rodriguez

Procurement Manager, Office Furniture Bill Garner Karen Allen

Senior Buyers Demetria Murray

Buyer 3:15 - 4:15 p.m. Team Interviews Everlynn Goff

Procurement Manager, Instructional Supplies Carri Wallis Danyelle Osborne

Buyers 4:15 - 5:15 p.m. Team Interviews Ad Hoc Principal’s Committee

Superintendent’s Conference Room

Team Discussion of Work Plan for Balance of Site Visit

Tuesday, October 11

7:00 - 8:00 a.m. Continental Breakfast Ken Huewitt

Controller 8:00 - 9:00 a.m. Team Interviews Robert Fazakerly

Procurement Manager, Technology/Office Equipment Ken Phillips

Senior Buyer Ryan Titzman Maria Goldman

Buyers 9:15 - 10:15 a.m. Team Interviews Andre Morrow

Procurement Manager, Transportation/Maintenance Gary Hogg Kimberly Burnaman Janice James

Senior Buyers 10:30 – 11:30 a.m. Team Interviews Earl Finley

Procurement Manager, Food Services Mark Martinez

Senior Buyer Beth Rutherford Jessie Ray

Buyer

11:45 - 12:45 p.m. Working Luncheon

1:00 – 2:00 p.m. Team Interviews Nicole Ware-Smith

Senior Manager, Warehouse Operations Oscar Montemayor

Manager, Warehouse Support Timothy Brown

Manager, Warehouse Operations Veronica Ruiz

Manager, Furniture Services Harvey Schulze

Manager, Vehicle Services

mailto:[email protected]





2:15 - 3:15 a.m. Team Interviews Focus Group wth Non-School Users

Instructional and Operational Divisions 3:15 - 4:30 p.m. Team Interviews Focus Group wth Non-School Users

Instructional and Operational Divisions

5:30 p.m. Team Discussion of Work Plan for Balance of Site Visit

Wednesday, October 12 7:00 - 12:00 Noon Team Meeting Discussion of Findings & Recommendations

12:00 - 1:00 p.m. Working Luncheon Dr. Terry Grier & Debriefing Superintendent Michele Pola

Chief of Staff Melinda Garrett

Chief Financial Officer Leo Bobadilla

Chief Operating Officer Ken Huewitt

Controller Rick Coulter

Procurement 1:00 p.m. Adjourn & Departures



Appendix C. DISTRICT PERSONNEL INTERVIEWED

Dr. Terry Grier, Superintendent of Schools

Michele Pola, Chief of Staff

Melinda Garrett, Chief Financial Officer

Ken Huewitt, Controller

Arnold Viramontes, Chief Information Technology Officer

Rick Coulter, Interim General Manager of Procurement

Enriqueta Berruete, Team Leader, Business Operations

Antoinette Lewis, Procurement Coordinator

Adam Arbour, Web Content Administrator

Jason Washington, Website Designer

Guy Mazzola, Procurement Manager

Ethel Kujimiyo, Document Control Administrator

Amiri Scott, Vendor Master Specialist

Elvis Eaglin, Procurement Manager, Construction

Chalita Cyprian, Procurement Systems Manager

Donna Aron, PROCARD Administrator

Patricia Griggs, PROCARD Administrator

Stuart Stratford, Travel Specialist

Cesar Rodriguez, Procurement Manager, Office Furniture

Bill Garner, Senior Buyer

Demetria Murray, Buyer

Everlynn Goff, Procurement Manager, Instructional Supplies

Carri Wallis, Buyer

Danyelle Osborne, Buyer

Noemi Vaglienty, Buyer

Robert Fazakerly, Procurement Manager, Technology/Office Equipment

Ken Phillips, Senior Buyer

Ryan Titzman, Buyer

Maria Goldman, Buyer

Andre Morrow, Procurement Manager, Transportation/Maintenance

Gary Hogg, Buyer

Kimberly Burnaman, Senior Buyer

Janice James, Buyer

Ursula Shelton, Buyer

Karen Allen, Senior Buyer

Earl Finley, Procurement Manager, Food Services

Mark Martinez, Senior Buyer

Beth Rutherford, Buyer

Jessie Ray, Buyer

Nicole Ware-Smith, Senior Manager, Warehouse Operations

Oscar Montemayor, Manager, Warehouse Support

Veronica Ruiz, Manager, Furniture Services



Harvey Schulze, Manager, Vehicle Services

Charotte Holden, Administrative Services

Aaron Spence, Chief School Officer, High Schools

Kevin Hobbs, Leadership Development

Dallas Dance, Chief School Officer, Middle Schools

Mark Smith, Academic Services

Bill Horwath, Performance Management

Sara Sagarnaga, Human Recourses

Sharon Eaves, Budgeting

Don Boehm, Finance Attorney

Richard Patton, E-Rate Compliance

Melanie Evans-Smith, Professional Support and Development

Victor Mitchell, School Police Department

Robert Mock, School Police Department

Terry Daniels, Police Department

Kermit Falgout, Risk Management

Dan Bankhead, Construction Services

Willie Burroughs, Facility Services

Brain Busby, Facility Services

Gavin Dillingham, Energy Service

Scott Lazar, Facility Services

Eugene Salazar, Facility Services

Mark Swackhamer, Transportation

Nathan Graf, Transportation

Issa Dadoush, Facilities Services

Alexis Licata, Business Assistance

Christian Masick, Policy Administration

Melanie Farmer, Transportation

Jimmy Dotson, School Police Department

Brian Giles, Food Service

Clifford W. Buck, Principal

Beverly J. Cage, Principal

Norma L. Perez-Gwynn, Principal

Armando Lujan, Principal

David E. Terrell, Principal

Kregg A. Cuellar, Principal

Michael D. Harrison, Principal

Hafedh Azaiez, Principal

Bertie A. Simmons, Principal

Takisha M. Bolden, Principal

Sonja Williams, Principal

Jaime Castaneda, Principal

Noelia G. Longoria, Principal



Appendix D. DOCUMENTS REVIEWED

HISD Organization Chart, August 2011

Procurement Services Organization Chart, September 2011

HISD Board Policies

o Ethics – Prohibited Practices, Issued 2/1/2010

o Fiscal Management Goals and Objectives , CCA1 (Regulation), Financial Ethics,

Issued 4/15/2010

o Fiscal Management Goals and Objectives , CCA2 (Regulation), Financial Ethics,

Issued 9/2/2010

o Fiscal Management Goals and Objectives , CCA(Local), Financial Ethics, Issued

11/30/2010

o Accounting – Audits, CFC (Legal), Issued 2/1/2010

o Accounting – Audits, CFC (Legal), Issued 6/14/2010

o Purchasing and Acquisition, CH (Legal), Issued 11/3/2009

o Purchasing and Acquisition, CH (Local), Issued 1/15/2010

Finance Manual, Procurement Section (1300)

Section 1303, Purchasing Guidelines

Section 1317, Supplier Performance

Flow Charts

o Business Process of Acquiring a Signed Contract

o Cross-Functional Team Process

o Instructional Products and Services, Evaluation Business Process

o Requisition Business Process

o Shopping Cart Business Process

o Complete RFP Flow Chart Process

o Waiver of Competitive Bidding Business Process

o SRM RFX Request for X Business Process

o Supplier Registration Business Process

o Assurance of Vendor Payment of Ad Valorem Taxes

o Supplier Score Card Business Process

Average Lead-time to Process Requisitions, August 2011

Amount Spent with M/WBE Suppliers, August 2011

PO Lines Processed Against Annual Contracts, August 2011

Dollar Amount and Number of New and Renewed Proposal Projects Completed per

Month

Procurement Services – Total Requisition Line Items Processed, August 2011

Supplier Registration, August 2011

Procurement Services – Total Dollars Spent on P.O.‘s, August 2011

Procurement Services – Total Number of P.O. Transactions, August 2011

Evaluation of Competitive Sealed Proposals for Alcott ES, Garden Villas ES, Woodson

MS Renovation, September 13, 2011

CSP Proposal Tabulation, Alcott ES, Garden Villas ES and Woodson PK - 8 Renovation

Project, July 14 2011

CPS Matrix, Alcott ES, Garden Villas ES and Woodson, August 29, 2011



Compliance Of ―Specific Conditions For Minority And Women Business Enterprise

Participation‖ Documentation For Alcott ES, Garden Villas ES, And Woodson MS,

Renovations,8/29/2011

Approval Of Primary Construction Methods For District Construction Contracts, Criteria

for Selection of Contractors, and Delegation of Evaluation Authority, Board of

Education Meeting of February 10, 2011

Request for Proposal (Pro-forma), Part I, II, III, & IV, Version 6.2

Suppliers Score Card, HISD Materials Management, (Internet Screen Shots)

Procurement Services, Employee Portal, (Internet Screen Shots)

Proposal Solicitations Download Homepage, September 14, 2011 (Internet Screen Shots)

Active Product Categories (54 Spend Categories and 457 Product Categories)

Annual Proposal Calendar, September 14, 2011

Procurement Services‘ ―BUYLINES‖, 9/20/2011

(Texas) Education Code, Chapter 44. Fiscal Management

Authority to Negotiate and Execute Interlocal Agreements with Various Purchasing

Cooperatives, Board of Education Meeting of January 15, 2009

(Texas) H.B. No. 628, May 2011

House Research Organization Bill Analysis, 5/6/2011, HB628

HISP Procurement Services Manual, Last Updated May28, 2010

How to do Business with HISD

Supplier Agreement Between Houston Independent School District and ―Name Of

Supplier‖, (Pro-forma)

HISD Procurement Services, Major Accomplishments Report, July1, 2010-June 30, 2011

Vision Statement, Mission Statement, Guiding Principles, Core Values, and Motto

HISD Sample Purchase Order

HISD ProCard, User Manual, Revised: August 2011

HISD Request For Quote (AED Maintenance)

SAP BI Reports (Screen Shots)

SAP Enterprise Portal, Training Manual

Service Contract between HISD and ― Provider‖, ( Pro-Forma), Revised May 2011

Request to Waive Competitive Bidding, (Form)

SRM Shopping Cart, (Screen shots)

Texas Education Agency, Financial Accountability System, Resource Guidelines,

January 2010

Procurement Services, Technology Plan

Request for Qualifications, Performance Audit of Contract Recommendation Awards

Processes, Project Number -11-09-04

Certifications of Procurement Managers/buyers

NIGP Webinars for 2008, 2009, ooler2010, and 2011

Over $10,000 Spend, by Contract, 2010-11

Sec. 271.903. COMMITMENT OF CURRENT REVENUE

2010-2011 Vendor Report, Description/Amount

Vendor Payments, 7-01-11 to 10-10-2011

Purchasing Order line Details, 10/10/2011



2010-2011 Expenditures For Professional, Consulting & Miscellaneous Contracted

Services

Project listing, Fazakerly Group, October 6, 2011

Request for Proposal, Project 10-06-06, Project Name: End User Devices District –wide

RFP Results, End User Devices: Computers; printers; & Servers (#10-06-06), October/

2010

Contracts by product Category

Approval of Primary Construction Methods for District Construction Contracts, Criteria

of Selection of Contractors, and delegation of evaluation authority.

Summary of Direct Payments, FY 2011

2010- 2011 Summary of Consultants, Miscellaneous Contracts, and Professional Services

Payments

Rodriguez Team Projects Summary

Goff Team Projects Summary

Food Service RFP Summary

Eaglin Team Projects Summary

Morrow Team Projects Summary



APPENDIX E. ABOUT THE COUNCIL


The Council of the Great City Schools is a coalition of 65 of the nation‘s largest urban public

school systems. The organization‘s Board of Directors is composed of the Superintendent,

CEO or Chancellor of Schools, and one School Board member from each member city. An

Executive Committee of 24 individuals, equally divided in number between Superintendents

and School Board members, provides regular oversight of the 501(c)(3) organization. The

composition of the organization makes it the only independent national group representing both

governing and administrative arms of urban education and the only education association

whose sole purpose is urban.

The mission of the Council is to advocate for urban public education and assist its members in

their improvement and reform. The Council provides services to its members in the areas of

legislation, research, communications, curriculum and instruction, and management. The group

convenes two major conferences each year; conducts studies of urban school conditions and

trends; and operates ongoing networks of senior school district managers with responsibilities

for such areas as federal programs, operations, finance, personnel, communications, research,

and technology. Finally, the organization informs the nation‘s policymakers, the media, and the

public about the successes and challenges of schools in the nation‘s Great Cities. Urban school

leaders from across the country use the organization as a source of information and an umbrella

for their joint activities and concerns.

The Council was founded in 1956 and incorporated in 1961, and has its headquarters in

Washington, D.C.



History of Strategic Support Teams Conducted by the


City Area Year

Albuquerque

Facilities and Roofing 2003

Human Resources 2003

Information Technology 2003

Special Education 2005

Legal Services 2005

Safety and Security 2007

Anchorage

Finance 2004

Communications 2008

Math Instruction 2010

Atlanta

Facilities 2009

Transportation 2010

Austin


Baltimore


Birmingham

Organizational Structure 2007

Operations 2008

Facilities 2010

Boston


Broward County (FL)


Food Services 2009

Transportation 2009

Buffalo

Superintendent Support 2000


Curriculum and Instruction 2000

Personnel 2000

Facilities and Operations 2000

Communications 2000

Finance 2000

Finance II 2003

Bilingual Education 2009

Caddo Parish (LA)

Facilities 2004

Charleston


Charlotte-Mecklenburg


Cincinnati





Chicago

Warehouse Operations 2010


Christina (DE)


Cleveland

Student Assignments 1999, 2000

Transportation 2000


Facilities Financing 2000

Facilities Operations 2000

Transportation 2004




Theme Schools 2009

Columbus



Facilities Financing 2002

Finance and Treasury 2003

Budget 2003



Food Services 2007

Transportation 2009

Dallas

Procurement 2007

Staffing Levels 2009

Dayton



Finance 2001

Communications 2002


Budget 2005


Denver


Personnel 2001




Des Moines

Budget and Finance 2003

Detroit




Assessment 2002

Communications 2002

Curriculum and Assessment 2003

Communications 2003

Textbook Procurement 2004

Food Services 2007


Facilities 2008

Finance and Budget 2008


Stimulus planning 2009

Greensboro




Facilities 2004


Hillsborough County (FLA)

Transportation 2005

Procurement 2005

Houston

Facilities Operations 2010

Capitol Program 2010


Procurement 2011

Indianapolis

Transportation 2007


Jackson (MS)

Bond Referendum 2006

Communications 2009

Jacksonville

Organization and Management 2002

Operations 2002


Finance 2002


Finance 2006

Kansas City



Finance 2005

Operations 2005

Purchasing 2006


Program Implementation 2007

Stimulus Planning 2009

Little Rock




Los Angeles



Finance 2005



Business Services 2005

Louisville

Management Information 2005

Staffing study 2009

Memphis


Miami-Dade County

Construction Management 2003

Food Services 2009

Transportation 2009

Maintenance & Operations 2009

Capital Projects 2009

Milwaukee

Research and Testing 1999


School Board Support 1999


Alternative Education 2007


Minneapolis


Finance 2004

Federal Programs 2004

Newark


Food Service 2008

New Orleans

Personnel 2001

Transportation 2002


Hurricane Damage Assessment 2005


New York City


Norfolk

Testing and Assessment 2003

Orange County


Philadelphia



Food Service 2003

Facilities 2003



Transportation 2003


Budget 2008

Human Resource 2009


Pittsburgh


Technology 2006

Finance 2006


Portland

Finance and Budget 2010

Procurement 2010

Operations 2010

Providence

Business Operations 2001

MIS and Technology 2001

Personnel 2001




Richmond

Transportation 2003




Rochester

Finance and Technology 2003

Transportation 2004

Food Services 2004


San Diego

Finance 2006

Food Service 2006

Transportation 2007

Procurement 2007

San Francisco

Technology 2001

St. Louis




Textbook Procurement 2004


St. Paul


Seattle







Transportation 2008

Capital Projects 2008

Maintenance and Operations 2008

Procurement 2008

Food Services 2008

Toledo


Washington, D.C.

Finance and Procurement 1998

Personnel 1998

Communications 1998

Transportation 1998

Facilities Management 1998


Legal and General Counsel 1998

MIS and Technology 1998



Transportation 2005


Common Core Standards 2011

Wichita

Transportation 2009

hisd procurement audit

Documents

great city

procurement

garden villas

blanket purchase

chief operating

internet screen

primary construction

procurement