NC superintendent asks auditor to investigate contract signed by state board chairman

Alleges contract violated state procurement laws
Updated: Jun. 23, 2020 at 8:35 PM EDT
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CHARLOTTE, N.C. (WBTV) – North Carolina Superintendent of Public Instruction Mark Johnson has asked the state auditor to investigate a contract signed by Eric Davis, the chairman of the North Carolina Board of Education.

Johnson sent a letter to Auditor Beth Wood earlier this month asking her to launch an investigation into a contract between the state board and an organization called the Southern Regional Education Board.

DOCUMENT: Letter from Johnson to the state auditor asking for an investigation.

SREB is an organization crated by a compact between southern states—including North Carolina—to research issues related to education.

Documents attached to Johnson’s letter show Davis entered into a contract worth $30,000 with SREB on behalf of the state board in mid-November. The organization was tasked with doing research and analysis requested by the North Carolina General Assembly related to implementing school equity reforms from the long-running Leandro lawsuit.

In an interview with WBTV, Johnson said the contract was executed by Davis without going through the state’s procurement process, which is required for any contract of $25,000 or more.

“It is clear from the investigation we have done that contracting law was violated,” Johnson said.

In his letter to Wood requesting an investigation, Johnson said his staff undertook an investigation of their own after Davis refused to answer questions about the contract.


Emails and other documents included in Johnson’s letter to the auditor paint a clear timeline of how events unfolded surrounding the contract.

DOCUMENT: Emails showing the timeline of events for Davis and Buxton to secure SREB to do the work.

In August 2019, board member JB Buxton began working to engage SREB to help on the project.

Emails show both Davis, the board chairman, and Buxton were in touch with the president of SREB through September and October discussing the scope of the project.

Buxton, the emails show, developed specific topics to be included in the study and, at one point, responded with additional questions on behalf of both him and Davis that he wanted answered before the contract could be finalized.

Those questions—and the specifics included in SREB’s answers—were included in the final proposal and contract sent by SREB for Davis to sign.

Davis signed the contract on November 3. The contract called for SREB to perform the work between November 1, 2019 and February 15, 2020 for a total amount of $30,822, with invoices to be submitted upon completion of the agreed work.

Johnson’s staff at the North Carolina Department of Public Instruction was asked to pay the invoice in mid February 2020.

Upon receiving the invoice, emails show, Johnson sent an inquiry to Davis.

“Last week, DPI purchasing received a requisition to pay the Southern Regional Education Board for the attached contract between the NC State Board of Education and SREB. DPI can’t find a record of this contract being reporter to DPI or to the State Board per CNTR-002,” Johnson wrote.

“Pursuant to State Board policies and state law, I have an obligation to ensure that all contracts are valid and legal,” the email continued. “I also have obligations to report potential violations to the NC Department of Administration and the NC Department of Justice.”

Johnson’s email contained a list of twelve questions related to the contract, including whether the state board voted to execute the contract and whether other procurement protocols were followed in securing the work.

Davis responded the following day, February 25.

“The submission of a requisition to DPI purchasing was premature. We agree that CNTR-002 and procurement rules must be followed and we are taking steps to address items identified in your message,” Davis wrote.

His email did not answer any of Johnson’s enumerated questions.

Johnson followed up that same day by asking Davis to answer the questions.

Davis responded the following morning.

“All agree that the Board’s contract rule and state procurement rules must be followed,” Davis wrote. “State agencies and vendors are all on notice that agreements that do not meet these rules to the letter are void from the outset. As my last email indicated, we are taking steps to satisfy all contracting formalities.”

At the time of Davis’ email, the work had already been completed by SREB.

On March 11, Johnson wrote all members of the state board and said his office would launch its own investigation.

On March 12, SREB said it would dissolve its contract.

“At this time, we will absorb the cost to our staff time and travel in the spirit of supporting the Board’s work on the state’s Every Student Succeed Act’s accountability system,” the letter from SREB’s president said.

Johnson alleges conflict of interest

In his letter to the state auditor, Johnson also accused one board member involved in the contract of having an undisclosed conflict of interest.

JB Buxton, who initially suggested SREB be hired for the project, has worked as a consultant for the organization.

Buxton disclosed his work for the organization on a statement of economic interest filed in September 2018 but did not disclose his work with the organization by name in subsequent filings.

His most recent SEI, filed in April of this year, lists work for a “regional education membership organization” in 2019 but does not specify that work was for SREB. Buxton has since confirmed he worked for the agency in 2019.

DOCUMENT: Contract signed by Eric Davis, the chairman of the North Carolina Board of Education.

Buxton sent a written statement in response to questions for this story.

“When the legislature mandated the State Board complete a study and recommendations related to the state’s accountability system for public schools, I reached out to the Southern Regional Education Board to see if they could assist the State Board and DPI on an issue of major importance,” Buxton’s statement said. “North Carolina is member (sic) of the SREB compact along with 15 other southern states, and SREB is an acknowledged national expert on state accountability systems and a bipartisan voice respected by our state policymakers.”

The statement also pushed back on any suggestion that his involvement in the state hiring SREB was a conflict of interest.

“There was no conflict of interest in reaching out to them because this type of service is what SREB regularly provides to its member states,” he said.

“When I originally contacted them, my assumption was that the services would be part of the state’s membership. As chair of the Board committee to which the report would be presented, my role was to ensure SREB’s work with DPI focused on the key issues regarding North Carolina’s accountability system and the requirements of the legislative study.”

Buxton’s statement did not address the fact that he was included on the email from SREB’s president with the final contract, which explicitly stated the state would be billed more than $30,000 at the conclusion of the project.

Davis did not send a statement in response to questions for this story and said he was unavailable to answer questions on-camera.

In his interview with WBTV, Johnson questioned why the contract was executed in the first place.

“There are rules in place for a reason. These rules are meant to be followed,” he said.

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