As a result of a report from Wickenburg Unified School District officials, the District’s former director of operations, William Moran, has been indicted by a State Grand Jury.
The Arizona Auditor General’s Office conducted an investigation which revealed that from June 2017 through February 2018, Moran participated with a District contract awarded to a vendor he had an undisclosed conflict of interest with, and he may have created 2 false price quotes for other unrelated District contracts.
The Auditor General’s Office submitted its report on the matter to the Arizona Attorney General’s Office, which on September 13, 2021, presented evidence to the State Grand Jury. The action resulted in Moran’s indictment on 4 felony counts related to conflict of interest, fraudulent schemes, and forgery.
Auditor General’s Report:
In fiscal year 2020, the District had revenues of approximately $16.4 million and served about 1,300 students. Moran worked at the District for more than 30 years and became the director of operations in 2013, where he was responsible for managing the planning, procurement, and progress of construction projects and approving construction vendor invoices for payment.
Moran resigned in February 2018 after being questioned by the District superintendent about an alleged fake bid associated with a District construction project request for proposals and providing the District superintendent with a written statement acknowledging that he had used a vendor’s previous bid to prorate pricing and “submit the bid.”
Additionally, during our investigation, we became aware that Moran may have also engaged in conflicts of interest.
From June 2017 through January 2018, Moran participated with a $95,850 District contract to an excavation vendor he financially benefited from and failed to disclose these benefits to the District.
Specifically, on his personal property where he planned to make a buildable lot, Moran received from this vendor District excavation site dirt valued between $50,000 and $70,000. Moran received an additional $2,000 benefit when he gave this vendor $30,000 and, in return, received $32,000 in the combined form of a $25,000 “IOU” and the vendor’s dirt compacting services valued at $7,000. District officials were not aware of these financial benefits and did not have a 2017 conflict-of-interest disclosure form on file for Moran.
Even though the engineering firm for the District’s excavation project informed Moran in June 2017 that the export material (dirt) could be used to flatten fill slopes at the District site, Moran did not pass this information along to other District employees or include it in solicitation materials provided to potential vendors in July 2017. Instead, Moran communicated with potential vendors his intent that dirt be delivered to a vacant lot he owned.
Of the 3 responding vendors, 2 expressed their concerns to Mr. Moran that it was either not feasible or not allowable to deliver dirt from the District site to Moran’s personal lot, and they were not awarded the contract. In August 2017, based on Mr. Moran’s recommendation, the District awarded the contract to the third vendor, who reported to us that he transported 500 to 700 truckloads of dirt from the District site to Moran’s personal lot. Although the vendor’s reported rate for this service was $100 per truckload, Mr. Moran received this dirt at no cost. Additionally, the vendor provided dirt pushing, compacting, and watering services valued at $7,000 that Mr. Moran paid only $5,000 for.
In November 2017, after the dirt was delivered, the Town of Wickenburg issued Moran a violation notice for working without a grading and drainage permit on this lot, citing “bringing in a large amount of fill” and potentially causing an adverse effect on existing drainage that required remediation by the end of December 2017. Moran remediated the violation, was issued a building permit, and built a 2,062 square-foot-home on this lot, which he and his wife sold for $445,000 in December 2019.
In October 2017 Moran gave $30,000 to the awarded vendor, who signed an “IOU” stating that $25,000 was payable to Moran less than a month later. The $5,000 difference may have been Moran’s payment for the vendor’s dirt compacting services described above valued at $7,000. The vendor did not pay the $25,000 “IOU” until January 2018, after Moran had approved the vendor’s $95,850 invoice to the District in December 2017. After Moran’s February 2018 resignation, the superintendent discovered the District’s excavation work was incomplete and contacted the vendor, who then completed the job.
In February 2018, Moran used amounts from 2 false price quotes on District procurement records for 2 other projects unrelated to the excavation project described above. These false price quotes were ostensibly from a construction vendor but were on fake letterhead. The false price quotes were created to appear as if they were on that vendor’s actual letterhead but had different formatting styles and omitted that vendor’s registrar of contractor’s license number. Moreover, that vendor reported to District officials and to us that these were not his bids (price quotes). Both false price quotes were included with the procurement records that Mr. Moran submitted to the District office when he recommended the contract awards for these 2 projects go to other vendors. Nothing came to our attention indicating that Mr. Moran had a financial relationship with these 2 vendors. Nevertheless, when questioned by District officials about 1 of these projects, Moran admitted that he used amounts from a previous bid submitted by that vendor to prorate concrete pricing and “submit the bid.” As described below, District officials stopped work for both projects and voided remaining purchase orders.
Although District officials allowed Moran to solicit vendors for District construction projects totaling less than $100,000, receive price quotes, recommend contract awards, provide progress updates to the superintendent, approve vendor work for completeness, and approve invoices without adequate oversight, they took prompt and appropriate actions after receiving a complaint that District procurement records contained a fake bid. In particular, District officials immediately conducted inquiries, examined documents, and requested a written statement from Moran. After reviewing his statement, District officials assigned Mr. Moran to work from home, stopped project work, voided remaining purchase orders related to the construction projects in question, began an internal review, and contacted us.