Union Urges Probe of District Computer Buy : Audit: Orange teachers cite critical outside report in asking the D.A. to investigate bid process for the $2-million purchase.


The union representing teachers in the Orange Unified School District has asked the Orange County district attorney’s office to investigate possible improprieties in the district’s purchase of a $2-million computer system last year, union officials said Thursday.

The Orange Unified Education Assn., citing an audit by the accounting firm of Ernst & Young, informed Dist. Atty. Michael R. Capizzi that the report raised the possibility that the district violated bidding procedures under state law and asked that he begin an investigation.

“The report indicates that the district may have violated the Education Code when it accepted IBM’s bid for the computer system,” union President Hazel Stover said in a letter to Capizzi. “Since this allegation has been made by an independent auditing firm, and given the $2-million cost for this new program, it would seem that further investigation is warranted.”

District Supt. A. Stanley Corey said he was not aware that the union had requested an investigation, but added that “if the D.A. wants to look into it, we’d be happy to help.”


“The fact is, it’s a state-of-the-art (computer) system,” Corey said. “I think there’s a lot of gas in those allegations.”

Stover cited a March 12 report from Ernst & Young, which was hired by the district to evaluate the computer system. The report criticizes the district for what it called “the haste of acquisition” of the system. According to the report, district officials issued an invitation for bids on Dec. 18, 1988, and set the deadline for proposals for only three weeks later. Only four bidders responded, two of which, the report noted, were “non-responsive"--that is, without formal bids.

“Given the holiday season and size of the procurement, it is not surprising that OUSD received only four proposals--two of which were non-responsive,” the audit report says. “The Education Code permits selection of a vendor where a district receives at least three qualified bids. We believe the four received responses did not constitute three qualified bids.”

The report also says that the IBM AS400 computer purchased by the district far exceeded the district’s needs, and that district officials bought it without preparing detailed plans and training programs for its use and before hiring a systems manager.

“These are major deficiencies in any computer project, but are particularly critical given the magnitude (over $2 million) of the acquisition and the fact that OUSD was going from having no (computer) capability to having its own major system,” the report says.

The computer system was purchased to keep track of all the district’s business affairs, including financing, student records, scheduling, inventory and security.

The report concludes that the district unfairly weighted its selection process toward IBM equipment and that “the negotiating and contracting process resulted in terms highly favoring” IBM, which supplied the computer hardware, and Macro, the company that supplied the software.

Stover said Thursday that the union is not directly charging the district with any wrongdoing, but noted that the report’s conclusions raise the possibility of impropriety and should be investigated.

“We feel it’s necessary to try to change the image of the district and do what is appropriate,” Stover said. “If there was no wrongdoing, we should have the record set straight. If there is some impropriety, it should be dealt with appropriately.”

Capizzi said that he has not yet received the union’s letter, which was dated May 15. He added that the allegations “will be evaluated” when he receives the audit report and that a decision will then be made on whether to proceed with an investigation.