August 7, 2009

School Superintendent
Susan Castillo
Oregon Department of Education
255 Capitol Street NE
Salem, OR 97301

Oregon Attorney General

John Kroger
Oregon Department of Justice
1162 Court Street NE
Salem, OR 97301-4096

State Auditor
Gary Blackmer
Public Service Building Suite 500
255 Capitol Street NE
Salem OR 97310

Dear Superintendent Castillo, Attorney General Kroger, & Mr. Blackmer,

We urge you to conduct a comprehensive investigation or audit into the alleged financial
and management improprieties at the Willamette Education Service District.

To quote a Statesman Journal editorial from November 20th, 2005, “the Willamette
Education Service District is a mess—a rotten, stinking mess. State and federal
investigators should be crawling all over it, rooting out evidence and filing legal and ethics
charges.”

Not much has changed in the past four years.

The problems at WESD date back at least five years when former Superintendent Skip
Liebertz retired with a sweet deal including a luxury SUV.

In November of 2005 Senate President Peter Courtney was quoted in the Statesman
Journal as saying this about WESD: “We need accountability for public funds and a
thorough investigation of internal financial and management decisions.”
In December of 2005 the House Interim Education Committee held a lengthy hearing
calling for several state agencies to investigate the financial dealings of the WESD. At the
time, the Secretary of State Audits Division, the Oregon Department of Education, and the
State Department of Justice all agreed to work together to look into any financial
wrongdoing at WESD. Not much came of that effort.

In late 2005 the WESD board called for a state audit into the possible financial
mismanagement at the agency. At one point the board proposed doing their own audit but
decided to wait and see what state officials came up with.

We are encouraged to see the WESD board put Superintendent Casey on leave until the
Board can conduct an investigation and the board also decided to perform an internal audit.
However, with all due respect, that is like the hen watching the hen house.

Last month 20 of the 21 school districts served by WESD called for a thorough and
independent audit to review all financial transactions between the ESD and the individual
school districts over the past five years. They also wanted details about expensive
technology services, comparison of actual cost of services versus the amount paid by
school districts, and clear communication by the WESD board regarding the audit they
requested.

It’s important to mention that the Teachers Standards and Practices Commission issued a
public reprimand for Superintendent Casey for failure to report misconduct by an
administrator. There were also complaints of serious financial wrongdoing submitted to the
WESD board by two other administrators four months ago.

Perhaps the legislature has not provided enough oversight of ESDs in general. Perhaps the
WESD board should assume more responsibility; after all they are the watchdog for
taxpayer dollars and services to students. But in order to get an outside assessment of the
ongoing problems we need the expertise your agencies provide.

We know the Oregon Department of Education, the Oregon Department of Justice and the
Secretary of State Audits Division were all involved in the Union-Baker ESD scandal. That
sets precedence for your agencies to join forces to examine what’s happening at
Willamette ESD.

We would like the following questions addressed:

1) Will you conduct an investigation or financial and performance audit of WESD?

2) If no, please explain why not. If yes, please describe the scope of the
investigation/audit?

3) If an investigation/audit is conducted what information will be available to the public?

4) If an investigation is launched please consider the following questions:
Is there a pattern of mismanagement at WESD?

Are WESD administrators, board members and employees following the law?

Is grant money being property accounted for?

Is the board being properly informed of contracts and other major expenditures by
management?

Are school districts being overcharged for technology or other services provided by WESD?

In conclusion, to quote another editorial from the Statesman Journal, July 19, 2009, “The
Willamette Education Service District has created an intolerable situation. Trust between
the district management and area school districts might be irrevocably broken. It’s clear
that the district board must move aggressively to create a new climate of openness,
financial transparency and trust.”

The state must step in to resolve the outstanding questions about WESD’s financial
irregularities and hold this agency accountable once and for all. We look forward to your
response at your earliest convenience.

Sincerely,

Kim Thatcher John Huffman

State Representative State Representative
House District 25 House District 59

Ron Maurer
Jackie Winters State Representative
State Senator House District 3
Senate District 10