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 user 2009-10-23 at 10:43:23 am Views: 60
  • #22501
    Lee County schools to review Office Depot purchases,Investigation spurs agencies to look for new contracts
    :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.

    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
    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:
    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.”