State auditors say a former bond director routed more than $2.6 million to his own company for work that was not performed. Attorney General Gentner Drummond says additional charges are possible.
OKLAHOMA CITY — A former Tulsa Public Schools bond director used an engineering firm as a middleman to route more than $2.6 million to his own company for architectural work that was never performed, according to a new state audit.
The 26-page forensic audit, released Tuesday by State Auditor and Inspector Cindy Byrd, identified $3.73 million in alleged fraud, misappropriation and improper payments.
Attorney General Gentner Drummond said his office is examining the findings and may pursue more criminal charges.
“My office is reviewing the full audit now, and we are not finished,” Drummond said. “Additional charges are on the table.”
How the money moved
Auditors said former TPS Executive Director of Bond and Energy Management Chris Hudgins directed Allied Engineering Group to bill the school district for architectural services the firm did not provide.
After TPS paid the invoices, Allied transferred $2.63 million to M&G Consulting Services, Hudgins’ private company, the audit said. The payments included about $985,000 tied to roofing projects, slightly more than $1 million for interior renovations and nearly $635,000 for HVAC work.
The architectural work was either unnecessary or performed by TPS contractors and vendors, auditors found. Allied retained at least $58,000 as an administrative fee for processing false roofing invoices before sending the remaining money to Hudgins’ company.
The report also said Allied used an improper billing method that resulted in at least $499,573 in overpayments.
In another arrangement, Hudgins authorized GLD Consulting — a company formed by three Allied employees — to handle Public Service Company of Oklahoma energy rebates without school board approval. GLD retained 30% of the rebates it processed, totaling $547,782.
Auditors said the TPS board routinely approved Hudgins’ recommendations without reviewing the underlying contracts or amendments. The district also failed to return $837,145 in federal pandemic-relief money because energy rebates were not properly reported, according to the report. That finding partly overlaps with the rebate money included in the audit’s $3.73 million total.
Criminal case already underway
Hudgins and Allied partners Gayle Gwinup and Thomas McKenna were charged in June with a combined 27 counts of conspiracy, embezzlement and kickbacks.
Those charges involve more than $779,000 in roofing project money and cover part of the conduct examined in the new audit.
Hudgins’ attorneys told News on 6 that he maintains his innocence and called the audit “a collection of one-sided allegations” rather than evidence or a verdict.
All three defendants are presumed innocent unless convicted.
In a statement provided to News on 6, Tulsa Public Schools Superintendent Ebony Johnson said the district cooperated with investigators and has added safeguards intended to improve transparency in its financial reporting. She said TPS plans to pursue restitution and continue assisting agencies investigating the case.
“Our students and our school communities deserve every dollar meant for them,” Johnson said.
