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 user 2009-10-23 at 10:42:19 am Views: 37
  • #22789
    Lee County schools to review Office Depot purchases,Investigation spurs agencies to look for new contracts
    FLORIDA :The Lee County School District is again reviewing its purchases with Office Depot, the office supply company accused of a complex overpricing scheme that may have cost governments across the country millions of dollars.Additionally, Lee County and the city of Fort Myers are working to obtain agreements with different vendors once their contract with the Boca Raton-based firm expires in January.But those actions aren’t enough when there are still hundreds of thousands of taxpayer dollars to be recovered, according to Fort Myers whistleblower David Sherwin, a former sales representative for Office Depot; and Chuck Short, director of internal audits at the Lee Clerk of Court.Office Depot, which did not return a request for comment Wednesday, is being investigated by attorneys general in six states, including Florida, and five federal agencies.Similar to a number of governments across the country, several local entities have already received refunds from the company amounting to more than $130,000.

    But Sherwin, formerly a fraud investigator with the Air Force and district inspector general in Fort Myers, said there is much more money to be recovered — at least $250,000 for the school district alone.Sherwin said those officials who have not conducted an independent audit are being irresponsible with taxpayer money and could be held criminally liable. He plans to ask for an investigation by the statewide grand jury on public corruption requested by Gov. Charlie Crist last week.Several local entities continue to maintain contracts with Office Depot despite the allegations and numerous refunds.“Everyone who has done a proper audit has found significant overcharges,” Sherwin said. “Any official who is buying from Office Depot right now is comparable to investing in Bernie Madoff after he was arrested and convicted.”

    The contracts
    Locally, those that held contracts with the company include the school district, the county, Fort Myers, Cape Coral, Edison State College and the Lee County Port Authority.

    Short and Sherwin explained the alleged scheme like this:
    All agencies piggy-backed off a competitive bid obtained by Los Angeles County, Calif., through an enterprise called U.S. Communities. Through this contract, they were guaranteed Office Depot’s lowest possible pricing for items such as pens, paper, ink and tape. But, in 2006, Sherwin, allegedly at the direction of Office Depot, switched the agencies from an Option 1 plan to an Option 2 plan — an average of 8 to 16 percent more expensive.Additionally, there was another, less-expensive plan available through the state of Florida, Short said.When Sherwin left Office Depot in April 2008, he sent numerous e-mails to all of the above agencies, notifying them of the overpricing and recommending independent audits to find it themselves. All said they looked into it, though some conducted random spot-checks rather than a complete audit.Cape Coral and Edison State College had Office Depot review the charges and both collected refunds.But the scheme was complicated and without an independent audit, Sherwin and Short said, the full scope of overpricing is almost impossible to uncover. Short conducted a $35,000 audit for the county and found $58,000 in overcharging, which was refunded.Short, who has been working with several of the investigating attorneys general, said he is convinced any agency that was switched from the Option 1 to Option 2 plan was significantly overcharged.

    The action
    The school district held a $3 million contract with Office Depot. Schools spokesman Joe Donzelli said when the district reviewed its purchases last year, it didn’t find any overcharging. In fact, Donzelli said the district found the company undercharged for certain items.Last week, Sherwin announced his plan to accuse Lee schools Superintendent James Browder and 14 other local officials of being criminally negligent for failing to conduct independent audits in a request for an investigation by the governor’s statewide grand jury.Donzelli said within the last two weeks, the district decided to “conduct a more thorough review” of the purchases.“We’re not writing this off,” Donzelli said. “As of right now, our auditors, financial accounting staff, procurement staff — no one has found the smoking gun. But we’re continuing to conduct a random sampling. If we find evidence of malfeasance or fraud that would warrant a full-blown audit, we will do that.”