Report: Tulsa Public Schools hid embezzler’s exit plan with secret payments

Before a major embezzlement scheme surfaced at Tulsa Public Schools (TPS), the ex-superintendent and others secretly arranged the official’s exit using covert payments to a consultant, a news investigation concludes.

A recent state audit had chastised the district for its “culture of financial non-compliance” allowing Devin Fletcher, former chief management and equity officer, to embezzle more than $824,000 from the district. 

However, internal records suggest school leaders had already known about the fraud long before revealing it to law enforcement, according to The Frontier, a nonprofit news organization. 

“Months before a high-level embezzlement scheme at Tulsa Public Schools was uncovered, former superintendent Deborah Gist and her deputies were quietly arranging an exit plan for the official behind it — and using secret payments to a private consultant to manage the transition,” Garrett Yalch wrote. 

‘Only a partial picture’ of district mismanagement 

The audit provided “only a partial picture” of the district’s financial negligence and failed to elaborate on officials’ response to Fletcher’s misconduct, according to the article. 

“Newly obtained documents — including auditors’ notes and memos, internal district emails, and procurement records — shed new light on these gaps,” Yalch wrote. “They show that Gist and her deputies began planning Fletcher’s departure as early as December 2021, more than six months before the district reported his scheme to the police.” 

This exit plan involved payments to a human resources consultant in New York at $175 an hour without school-board oversight, internal documents showed. 

“According to the documents, the arrangement to pay (the consultant) directly through the foundation was designed ‘to avoid Board approval, keeping the project confidential’ and violated district procurement policy.” 

An internal memo showed the Oklahoma State Auditor and Inspector’s Office had also noticed discrepancies regarding the district’s report of the fraud. 

“If Fletcher’s plans to leave the District were not prompted by the discovery of his questionable vendor practices, then why did TPS act in secrecy about the transition?” an investigator wrote. 

Although the district had taken steps to plan Fletcher’s departure in December 2021, its internal investigation into the fraud didn’t officially begin until June 2022, according to Yalch. 

“Tulsa schools lawyers told the auditors they opened the investigation after an employee told district legal counsel that she had received a suspicious bonus. The next day, an attorney for the school district said she asked outside legal counsel to begin investigating. The outside lawyer contacted police more than two weeks later, on July 1. No board approval was obtained for the internal investigation and there is no evidence the board was informed, according to the documents.” 

Such a timeline seemed “implausible” to auditors, Yalch noted. 

“The employee who reported the suspicious bonus and a district attorney didn’t document the exact date of the whistleblower disclosure — despite having given auditors the exact dates of numerous related events.” 

Meanwhile, Fletcher had left for a vacation to Israel on June 8, “a day before the investigation began,” Yalch wrote. He remained on leave until June 30 when the district terminated his employment. 

“The internal investigation proceeded during that time, out of public view, without notification to law enforcement or the board.” 

‘Very unlikely’ failures of documentation 

Further investigation also revealed “gaps in district records” from the summer of 2021 into early 2022, according to Yalch. 

“Auditors found the discrepancies by cross-referencing emails from senders that were never found in recipients’ inboxes along with the absence of emails for specific individuals during similar timeframes. The auditors wrote that the pattern ‘could be an intentional omission’ and was potentially in violation of the Oklahoma Open Records Act. They made repeated requests to Tulsa schools lawyers, who sometimes provided more emails, but most of the gaps remained, according to documents.” 

The district defended itself by saying it had met all requests from state auditors during their two-year review. 

“Tulsa Public Schools has been billed in excess of $250,000 for the state’s investigation,” it told The Frontier. “This figure represents what has been invoiced to Tulsa Public Schools, but does not include the thousands of hours of staff time required to be responsive to the extensive requests from the auditor’s office.” 

However, the missteps uncovered by researchers suggest otherwise. 

“An auditor wrote in a memo that these anomalies raise the possibility that other Tulsa Public Schools employees were aware of Fletcher’s misconduct long before it was reported and took steps to cover it up,” Yalch wrote. 

The failure of district staffers “to recall or document the significant event dates seems very unlikely and should be noted,” auditors concluded. 

Waiver process 

Even after Fletcher left, questionable practices continued as the former superintendent hired Arledge & Associates to audit district finances without a signed contract or board approval, Yalch wrote. 

“Gist created a ‘waiver process’ that let administrators bypass competitive bidding for contracts that were to be reimbursed by donors, according to the documents. Employees used what they referred to as Gist’s process to approve payments to Fletcher’s half-sister for $200,000 in services later found to be fraudulent, according to the documents.” 

Gist also went on four vendor-paid trips “in violation of (school) policy” before it was later revised, according to the article. 

“The waiver mechanism was an end-run around oversight, according to the documents. Invoices were often approved without itemization, review, or board visibility, documents say. Staffers sometimes discussed high-dollar payments in casual emails.” 

So far Gist has not been charged with any crimes. She resigned in August 2023 after criticism from Oklahoma State Superintendent Ryan Walters over the district’s poor test scores and fraud. 

“In a video posted on social media earlier this month, Walters said that 65% of TPS schools are failing, and 15 elementary schools have a reading proficiency rate of less than 5%,” the Center Square reported at the time. “He also said 52% of every dollar goes to administrative costs, not the classroom.” 

Walters also reviewed the Confucius Classrooms program used in TPS, which has funding ties to China. 

“We will be requiring school districts to report any funding … to us,” he said, “where foreign dollars are being used directly or indirectly through nonprofits.”