Financial Disclosures Management Advisory

TO:          Prince George’s County Public Schools (PGCPS) Board of Education

FROM:    Frank S. Turner II, Integrity & Compliance Officer

DATE:     December 19, 2024

RE:         ENFORCEMENT OF FINANCIAL DISCLOSURE FILINGS

During the first half of FY2025, the Prince George’s County Public School System (PGCPS) Board of Education (Board) has experienced significant changes in its composition as a result of transitioning to an all elected board, a member resigning in July, and most recently transitioning to absorb four newly elected members. The PGCPS community is maintaining their highest trust in this oversight body to ensure no PGCPS official has any economic interest that may harm the system’s fiscal accountability. As public officials, Board members, the PGCPS executive cabinet, appointed officials, and certain employees are required to be free of improper influence and exercise independent judgment. Board Policy (BP) 0107 (Code of Ethics) requires board members to file, generally on an annual basis, a financial disclosure statement (FDS) disclosing certain financial interests. Furthermore, a Board member who leaves office for a reason other than death must file a final FDS within 60 days after termination, covering the current calendar year and preceding calendar year (unless a statement was already filed for the prior year). Per BP 0107, a Board Chair appointed Ethics Advisory Panel (Panel) is responsible for maintaining and reviewing FDS for compliance with this policy.

The PGCPS Office of Integrity and Compliance (OIC) became aware that former District 1 Board member, David Murray, did not file the required final FDS within 60 days after his resignation on July 16, 2024. Murray’s failure to file this final report demonstrates the lack of compliance and enforcement of BP 0107 with regard to the required filings, which may lead to situations where conflicts of interest can arise without proper oversight or accountability. As a result of this omission and to prevent similar situations in the future, the OIC issues this Management Advisory with the following recommendations for the Board to ensure adherence to BP 0107 and to enhance the Panel’s role in tracking, maintaining and reviewing FDS pursuant to this policy:

1. Revise and update the training materials on Panel’s duties and responsibilities: The Board must improve, revise and update the training materials covering the duties and responsibilities of the Panel for more clarity and understanding on their role of tracking, maintaining and reviewing FDS for proper alignment with BP 0107. The training should provide a clear guidance on the purpose of and implementation of BP 0107. In addition, it should strengthen the Panel’s role of tracking FDS filings, establishing an FDS reviewing process, and implementing a notification process to delinquent FDS filers. It is critical this training emphasizes and provides understanding of the detriment it may cause to PGCPS if FDS are not timely filed by the required PGCPS officials and subsequently reviewed by the Panel. 
2. Create a tracker for FDS Deadlines and Delinquent Filings: This tool will assist the Board and the Panel in centralizing FDS information related to FDS deadlines, required filers, and delinquent individuals. At the minimum, the tracker should include the following data: Official’s name, title, PGCPS office, FDS deadline, delinquent filing years, date of delinquency notice, and filing status (e.g. pending, filed, late filing, etc.). This tool will allow the Panel to monitor the status and deadline of FDS, and will ensure adherence to legal and policy requirements, with the ultimate goal of identifying potential conflicts of interest.
3. Provide notice to delinquent FDS filers: A notification process should be established for the Panel to issue a notice of delinquency to an Official who is required and fails to file the FDS, with a 15-day period for the delinquent Official to provide a response and file the FDS promptly.
4. Impose a penalty for late filing: BP 0107 should be amended to impose a late fee for per day, up to a maximum amount, for delinquent filers. For a Board member who leaves office, for any reason other than death, and therefore subject to the final FDS filing requirement, the final paycheck or any pending reimbursement should be conditional to this final FDS filing.
5. Due Diligence Procedure for the Review of Financial Disclosures: The review process of FDS is a critical step to achieve BP 0107’s objective of identifying conflicts of interest. As such, the OIC recommends for the Board to allocate resources for a specialized facilitator to provide due diligence training for the Panel to thoroughly review the information provided in the FDS and identify any possibility of conflict of interest. In addition, the specialized training should assist the Panel in establishing a vetting procedure for this purpose. At the minimum, the Panel should be trained in the following review efforts.

 a. Leveraging public records (e.g. business records, property deeds, tax assessment records, etc.) to verify reported ownership of real property and companies;

 b. Thorough review of business records to determine if a filer owns other companies not reported in the FDS or if business records revealed connections or affiliations that may lead to a potential conflict of interest;

 c. Thorough review of property ownership records to identify additional connections (e.g. spouse or other);

 d. Accessing credit header data to verify current debts and if PGCPS is the current holder of any encumbrance. In addition, this access will help track recent addresses and identify any change in residence and physical presence;

 e. News media searches for any derogatory information indicating the appearance of improper influence;

 f. Accessing PGCPS’ vendor system to search if any reported and additional companies identified are approved vendors and therefore, conducting business with PGCPS;

 g. Conduct name traces through the Office of Integrity and Compliance (OIC) and the Office of Internal Audit (OIA) for any derogatory information and any allegations of financial impropriety; and

 h. Performing the aforementioned review process on the filer’s connections, to identify any indirect financial interests not disclosed in the FDS;

 i. Requesting and obtaining additional information or documentation from the FDS filer to clarify discrepancies found in the FDS and to ensure accuracy.

Enhancing the Panel’s training and providing adequate tools will empower the Panel to take a more proactive role in tracking, maintaining and reviewing FDS. Adopting the above OIC recommendations early in calendar year 2025 will strengthen adherence to BP 0107, enable the Panel to effectively identify any potential conflicts of interest, uncover any fraud or corruption opportunity, and ultimately increase public confidence in the Board’s fiscal oversight. This Management Advisory also serves as a reminder for the Board and the Panel to track the upcoming final FDS of recently departed Board members, that should be filed within 60 days after leaving office.