Tulsa Public Schools Audit Finds $3.7 Million Misspent

Tulsa Public Schools Audit Finds $3.7 Million in Misspent Bond Funds

Tulsa Public Schools audit findings released Tuesday detail approximately $3.73 million in alleged fraud, misappropriation and improper payments involving bond money intended for district projects.

Oklahoma State Auditor and Inspector Cindy Byrd released the second part of the special audit Aug. 18, expanding on an investigation that already resulted in criminal charges against former TPS Executive Director of Bond and Energy Management Chris Hudgins and two engineering firm partners.

Auditors allege Hudgins used his position to direct taxpayer money to preferred vendors while operating his own private company from district offices.

Tulsa Public Schools Audit Details $3.73 Million

The audit found Hudgins allegedly operated M&G Consulting, his private business, from TPS offices beginning in 2014 while overseeing tens of millions of dollars in taxpayer-funded projects.

Tulsa engineering firm Allied Engineering allegedly paid approximately $2.6 million to M&G Consulting for architectural services connected to roofing, interior renovation and HVAC projects.

The Oklahoma State Auditor and Inspector found the services tied to those payments were never delivered.

Auditors also identified more than $58,000 in fees paid to Allied for processing allegedly false roofing invoices.

Another portion of the audit involved GLD Consulting, a company formed by three Allied employees. Hudgins allegedly allowed the company to administer TPS's Public Service Company of Oklahoma rebate process without School Board approval.

GLD retained 30% of the rebates, totaling $547,782, while auditors identified another $499,573 in overpayments resulting from an improper billing method used by Allied.

Criminal Case Could Expand

The findings go beyond the alleged conduct already at the center of a criminal prosecution.

In June, Hudgins and Allied Engineering partners Thomas McKenna and Gayle Gwinup were charged with 27 criminal counts connected to an alleged $779,317 scheme involving TPS.

The Oklahoma Attorney General's Office said those charges include allegations of embezzlement and conspiracy.

Attorney General Gentner Drummond said his office is reviewing the newly released audit and that prosecutors are not finished with the case. He said additional charges remain possible.

Attorneys representing Hudgins maintain his innocence and cautioned that the audit contains allegations that have not been tested in court.

Hudgins, McKenna and Gwinup are presumed innocent unless and until proven guilty.

Audit Raises Questions About TPS Oversight

The Tulsa Public Schools audit also raises significant questions about how bond projects were supervised.

Auditors found the TPS School Board approved payments based on Hudgins' recommendations without adequately reviewing underlying project contracts and amendments.

Byrd said the arrangement effectively gave Hudgins broad control over the bond department without sufficient checks on his decisions.

Current Tulsa Public Schools leadership says the district has cooperated with investigators and implemented additional safeguards designed to increase transparency in its financial reporting.

Superintendent Dr. Ebony Johnson said the district intends to pursue available legal remedies in an effort to recover money allegedly taken from TPS.

The Tulsa County District Attorney's Office is also reviewing the new findings.

With $3.73 million now identified by auditors, the investigation has grown substantially beyond the allegations that produced the first criminal charges — and state prosecutors say the case could expand again.

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