Is Houston Another Place Where Oversight Goes to Die?

In a disappointing, but not surprising move, the Houston Independent School District failed to renew the contract of its chief auditor last week. Richard Patton, whose two-year tenure at the school district was marked by success in turning around a struggling internal audit function, fell victim to an all-too-common danger for conscientious practitioners.

Simply put, Patton was let go for doing his job.

Patton was suspended by the district in March for unspecified allegations of misconduct and was allowed to return to work in a diminished capacity in August. Despite requests by Patton’s attorney, the district has refused to make public the investigation, which cost the district a reported $17,000, so the reasons for his suspension remain unclear.

What is clear is that Patton found problems with the district’s oversight of its massive US$1.9 billion construction bond program. An audit of the program pointed to poor oversight and lack of controls as the cause for US$211 million in cost overruns, not inflation as the district’s manager’s claimed. An outside audit has verified the oversight problems identified by Patton and his team but also found inflation contributed to the overruns.

What is more troubling are additional details that came out as part of a lawsuit Patton filed within days of his return to work. Patton and his attorneys have said he was suspended after notifying the Federal Bureau of Investigation, the Houston Independent School District (HISD) police chief, and the Harris County District Attorney’s Office about possible illegalities in the district’s construction contracts, according to published reports. 

If Patton’s concerns about illegalities in construction contracts are accurate, the folly of the district’s actions raise a troubling concern that someone is trying to cover up illegal acts.

The reprehensible treatment of an accomplished internal auditor doing his job should be troubling to any practitioner. It should be equally appalling to the taxpayers of Harris County, where Houston is the county seat.

The watchdog role of internal audit in government is well-established, and history is replete with examples of its work serving the public interest. Internal auditors often shine the light on fraud, waste, and abuse in government. It has been said that light is the best disinfectant. But from a distance, it appears the Houston school district is allergic to disinfectants.

The district’s board of trustees have exhibited highly disturbing behavior on multiple levels. Aside from the prima facie case of retaliation against Patton, they likely wasted US$17,000 on a suspicious investigation, then they doubled down on that debacle by refusing to say what the investigation found. It is time to make its findings public. If there is no basis in the investigation for the actions that have been taken against Patton, then those who ordered the taxpayer-funded witch hunt should be held accountable.

I fear that the board of trustees will continue on their misguided journey when it comes time to hire a new chief auditor. Over my four decades in internal auditing, I have seen how this scenario plays out. The board will seek to hire someone who will fill the role in name only, not in function. They showed they have little interest in learning the objective truth about the district’s operations when they “shot the last messenger.” Does the school district want to be saddled with the reputation of being the place where oversight goes to die?

Even if by some quirk of circumstance or conscience the board sees the errors of its ways and genuinely seeks to find a suitable replacement, the school district’s reputation will precede it, making it harder to find a qualified and independent professional to take on the role of HISD chief auditor.

I must also speak up for Patton, whose reputation has been sullied by the worst kind of political retribution. By all accounts Patton is a highly qualified and respected internal audit professional. I do not question for a moment his exercising his right to seek legal recourse in this case. As I’ve previously written, some government CAEs who have taken their complaints to the courts have told me that it was crucial that they do so in order to clear their name and professional reputation after public officials had besmirched them.

The first step in clearing Patton’s name should be for the school district to make public its investigation and allow Harris County taxpayers to decide for themselves who truly was acting in their best interest. I’m certain when all is said and done, Richard Patton will be able to hold his head high. As always, I welcome your comments.