MGT Consulting, a company that has overseen Adams County School District 14 since 2019, used district money to hire contractors to do work it was supposed to do itself, according to a forensic audit released Thursday.

The audit performed by Eide Bailly LLP found that MGT spent nearly $500,000 of the district’s funds to pay eight contractors or vendors. One of these contracts exceeded the district’s budgeted amount by nearly $76,000, according to the audit.

“MGT … did not properly oversee district expenditures and appeared to have grossly misused district resources on purchases that should have been covered by its significant fees,” said Ramona Lewis, president of the Adams 14 school board.

Under its contract, MGT was responsible for providing leadership development and support, financial assessments, project management and other services. According to the audit, it paid contractors or vendors to perform many of these services. For instance, each of the five contracts with 2Partner Mathematics Consulting “defines a scope of services that appears similar to various services set forth in the Management agreement.”

MGT voluntarily left the district earlier this month after the school board voted to terminate its contract with the company after learning the results of the audit. The findings were initially withheld by the Adams County District Attorney’s Office, which has since determined that there was not enough evidence to file criminal charges against MGT, Lewis said.

The state Board of Education appointed MGT to oversee the district after it received poor accountability scores eight years in a row.

MGT Executive Vice President Eric Parish said the release of the audit is “the latest in a series of charades from Adams 14” and added that the district’s claims were unsubstantiated.

“Today’s press conference is another example of the Adams 14 Board … (making) much ado about nothing,” Parish said in a statement. “There is nothing here, as the District Attorney’s office itself has said, and the auditors would have come to a similar conclusion if they had actually interviewed anyone from the district’s Accounting or Finance departments or anyone from MGT.”

Robert Lundin, a spokesman for the school district, said the point of the audit was to examine and analyze transactions made by MGT.

“It’s purely an analysis of transactions in comparison to contracts and is different than an investigation,” Lundin said. “Forensic auditing is a very precise process (in) which an independent entity analyzes transactions and Eide Bailly stands by their methodology and did so with no interference from district officials to ensure both the independence and reliability of its findings.”

Tensions between the district and MGT escalated last fall when Adams 14 stopped working with MGT, resulting in the district becoming the first in Colorado to lose its accreditation.

Adams 14’s accreditation was restored days later when the two parities agreed to resume working together. 

Last month, after the Adams 14 school board voted to terminate its contract with MGT, the state Board of Education denied a motion to allow Adams 14 to choose its new oversight management company.

Adams 14 officials have temporarily regained authority over the district after MGT’s departure, but they said they want a partner that will help the district grow together.

Colorado’s Board of Education will hold a hearing this spring to determine the next steps for Adams 14, which serves over 6,000 students.

“We continue to focus on the goal of improving academic outcomes for students,” state Education Commissioner Katy Anthes said in a statement. “The board will hold a hearing in April, and it is legally obligated under the Accountability Act to take action to improve student achievement. We are waiting for the input from the independent State Review Panel, and have invited the district to make a proposal as well during the April hearing.”

During Thursday’s news conference, Adams 14 Superintendent Karla Loría said the district’s administrators and educators were focused on helping students succeed. 

“We maintain a No. 1 focus on our students. Our students are our No. 1 priority despite all this noise,” Loría said. “They always have been and will continue  being our No. 1 priority.”