Internal Audit Report - rps205.com Audit/Audit...to meet the various needs for telephone and data communications. ... a migration has been taking place, ... Internal Audit Report Roman

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TO: Dr. Ehren Jarrett, Superintendent

Lori Hoadley, General Counsel

cc: Matt Zediker, Chief Human Resource Officer cc: Nicole Thorn, Chief Financial Officer cc: Heidi Dettman, Executive Director of Instructional Support cc: Lori Burke, Human Resources Consultant

FROM: Roman Gray, Internal Auditor DATE: October 20, 2017 SUBJECT: FINAL REPORT: AT&T Telecomm Contracts & Cost Settlement This report discusses the cause, effect, and correction of the October 2015 AT&T contract renewal and subsequent settlement of disputed charges, which was presented to the Board for approval on July 11, 2017. Formal responses to the audit findings are included at the end of this report. INTRODUCTION & BACKGROUND Telecom: The District utilizes a number of services (hereafter referred to as “telecom”) provided by AT&T to meet the various needs for telephone and data communications. Although the scenario is quite complex, and to simplify for the sake of this report, these services include what are commonly referred to as “Centrex” lines, “SIP” lines, POTS (“Plain Old Telephone Service”) lines, and other analog services. As technology has advanced in recent years, a migration has been taking place, where analog services are being replaced with digital. As the District builds and utilizes the infrastructure to support digital services, recurring expenses for telecom services can be expected to decrease with the transition from analog to digital. For the past several years, the District has maintained several separate contracts with AT&T for telecom services, all of which contribute to the portfolio of services and line types currently utilized for operations. These contracts were approved for renewal at two separate Board meetings in 2015: Group 1: 5/12/2015:

• AT&T Managed Internet Service • AT&T IP Flexible Reach, AT&T IP Toll-Free, and AT&T Voice DNA

Group 2: 10/13/2015: • AT&T ILEC Centrex Service (4 separate contracts to cover all District needs)

Each of these contracts must be renewed with AT&T on a regular basis in order to secure the best rates, and failure to renew will result in higher out-of-contract rates. The District works closely with its AT&T sales representative for contract and other AT&T telecom issues.

Internal Audit Report Roman Gray, CIA, CFE Internal Auditor – Legal Department, Rockford Public Schools District #205 501 7th St., Rockford, Illinois 61104 (815) 489-0539 [email protected]

mailto:[email protected]

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In the past, the District and other similar organizations found AT&T to be somewhat forgiving when contracts were not renewed timely; as a result, it became common for organizations to assume that contract renewal failures were easily correctible and of little consequence. However, due to strict moves and greater scrutiny by the FCC, AT&T no longer has the latitude that it once had to forgive, remove, or otherwise re-rate phone charges after they have been applied when there is a lapse of contract. According to the District’s E-rate consultant, this shift has resulted in many organizations being held responsible to cover out-of-contract charges. In short, this unfortunate situation is not unique to the District. E-rate: The District receives discounts on telecom services through the E-rate program, by means of cost reimbursements through the Universal Service Administrative Company (USAC), an independent, not-for-profit corporation that helps eligible schools and libraries in the United States obtain affordable telecommunications and internet access. The program is intended to ensure that schools and libraries have access to affordable telecommunications and information services. The District utilizes the services of an E-rate consultant to assist in the administrative process and to clearly understand the nuances of the program. E-rate funds are disbursed to the District as percentages of dollars spent. As the technology has shifted, there has been a related shift in the application of E-rate funds. According to the District’s E-rate consultant, the trend downward in E-rate reimbursement for voice services, such as Centrex lines, is as follows: FY2016: 70% reimbursement FY2017: 50% reimbursement FY2018: 30% reimbursement FY2019: 10% reimbursement These are actual rates (as opposed to projected), and the District can currently expect a reimbursement of 30% for voice services for FY2018. (Centrex lines are considered “voice services”.) Investments in data infrastructure and fiber-optic networks will be reimbursed at 85% and 90%, which will offset the reduction in reimbursement for voice services, and can be expected to correspond to the District’s decreased use of voice services as it transitions to digital. CONDITION At the July 11, 2017 Board meeting, a contract was presented for Board approval by the Chief Operating Officer (COO). This contract was a settlement between the District and AT&T, for disputed charges stemming back to a significant billing increase in 2015, for the following invoices:

Billing Date Invoice Amount

9/5/2015 343,053.93† 10/5/2015 165,069.20 11/5/2015 181,536.19* $ 689,659.32 Normal invoiced charges for these AT&T services had been approximately $40-45K per month. Under the renewed contract, the charges would have decreased to approximately $20-30K per month. † Includes out-of-contract charges for both July and August, 2015.

* Includes interest of $5,145.81, which was credited back in March, 2016

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In September 2015, when this anomaly occurred, the AT&T invoices were being paid by the Finance Department without a management review by the Operations or Technology Services Departments. Finance brought the invoices to the attention of the Technology Services Coordinator (see Exhibit A), and payment for these invoices was withheld while the matter was sorted out with AT&T. It was quickly determined that the contracts for AT&T Centrex lines had expired, and the District was being charged out-of-contract rates for these services. The Board approved a contract renewal with AT&T for Centrex lines on 10/13/2015, after which point the rates decreased significantly. * In February 2017, the Operations department began reviewing all telecom invoices prior to their being processed for payment. See Exhibit B for comparative cost information, at the end of this report. CRITERIA The responsibility for addressing telecom services and issues has been shared informally between Technology Services and Operations in recent years. Due to the shift in the application of technology between analog and digital services, the line has become blurred between telecommunications (i.e., Operations) and technology. Both Operations and Technology Services deal directly with the E-rate consultant and with AT&T. The COO’s discussion of this issue at the 7/11/2017 Board meeting (See Exhibit K) clarified that the COO, the Chief Quality and Process Officer (who oversaw Technology Services), and the Technology Services Coordinator were all working together on the renewal of the AT&T contracts that would expire in 2015. Administrative Regulations designate the process and guidelines for contract approval in section 4.60R(2). (See Exhibit M) CAUSE 2/11/2015: The District’s AT&T representative notified the Technology Services Coordinator by email that Centrex lines would be expiring, and attached the 4 separate contracts that were up for renewal. Mid-April 2015: The Technology Services Coordinator received emails from the District’s E-rate consultant, informing him of an E-rate audit that was being conducted, and of the need to investigate the lines and services being utilized, in order to correctly and most advantageously apply for E-rate funding. The Technology Services Coordinator was asked to prepare a response to questions raised in the audit. 5/12/2015: The Rockford School Board approved the following contracts with AT&T (Group 1):

• AT&T Managed Internet Service • AT&T IP Flexible Reach, AT&T IP Toll-Free, and AT&T Voice DNA

The Centrex contracts (Group 2) were not submitted for approval at this time. 5/21/2015 – 7/21/2015: Communication was ongoing between the Technology Services Coordinator and the District’s AT&T representative regarding the need to renew the 4 contracts for AT&T Centrex lines (See Exhibits C & D). AT&T sent specific reminders or requests for updates to the Technology Services Director on the following dates: 5/29, 6/11, 6/19, 6/26, and 7/21. The last documented response from the Technology Services Coordinator was on 6/18, indicating that the contracts had not been sent to the board, and that there would be a delay of a “couple of weeks”. When questioned (during this audit) about the failure to timely renew the contracts, the Technology Services Coordinator could not recall the

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reason for the delay, and stated that he would have been communicating verbally with his supervisor and with the COO about the outstanding contracts. 6/30/2015: AT&T Centrex contract expired. 9/15/2015: Finance department contacted Technology Services Coordinator and Chief Quality and Process Officer (Exhibit A) to request explanation for September 5 AT&T bill of $343,053.93 received for services that normally ranged between $40k -45k. 10/13/2015: The Rockford School Board approved Centrex line contracts (Group 2) with AT&T. All 4 contracts were renewed. The contracts were not processed in accordance with established procedures in that they were not reviewed by Legal or any other cabinet member prior to Board approval. See Exhibit C for e-mail log CONSEQUENCE & SUBSEQUENT ACTIVITY The billing consequence of the failure to timely renew the Centrex agreements is as follows: 9/5/2015 10/5/2015 11/5/2015 Total

Actual expense: 343,053.93 165,069.20 181,536.19 $ 689,659.32

Estimated expense*: 30,000.00 30,000.00 20,000.00 $ 80,000.00

Estimated excess charges†: 313,053.93 135,069.20 161,536.19 $ 609,659.32

7/11/2017 Settlement: $344,829.66

Estimated additional charges to District for failure to renew contract: $264,829.66

* Based on 2016 expense for the same months, incurred under the same contract that would have been in place as of July 1, 2015.

† Outstanding charges at the time of the settlement ($744,016.26) included additional unpaid invoices, which represented appropriate expenses and normal billing issues while the District worked with AT&T to resolve the Centrex problem.

7/11/2017 Board Presentation: In order to correctly understand the issues at hand, Internal Audit reviewed the transcript of the COO’s presentation to the Board (Exhibit K) primarily in response to questions presented by the Board. The following was noted:

1. It was stated in the Board agenda (See Exhibit J), and also in the COO’s response to questions from the Board, that the District would receive a reimbursement of 70%. These representations were not accurate.

The Board agenda Fiscal Impact Statement for this item stated the following:

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“The proposed estimated expenditure of $344,829.66 for the services is reimbursable at the E-rate discount percentage of 70% resulting in a net cost of $103,448.90.” E-rate reimbursement: Per the District’s consultant, the maximum amount available to the District for E-rate reimbursement has already been received for 2015 and 2016, based on originally-requested amounts. There will be no further E-rate reimbursement for the increased charges, and E-rate reimbursements will not apply to the settlement. In response to this audit inquiry, the E-rate consultant stated that he had not been contacted by the District to discuss any potential for reimbursement in this unique situation, and that if he had, he would have explained that no additional E-rate reimbursement would be available (See Exhibit E). The E-rate consultant gave several reasons why the E-rate reimbursement would not have applied to the agreement presented to the Board for approval on 7/11/2017: 1) By July 2017, final deadlines had long since passed for any possible re-submission for 2015

phone charge reimbursements. 2) The E-rate program would have rejected the exorbitant charges for the months of July -

October 2015, due to being significantly higher than the projected costs submitted with the original application forms for 2015 E-rate reimbursement.

3) The District already received the maximum allowable E-rate reimbursement for 2015 based on the original request for funds for that year.

4) Settlement agreement sums are not eligible for E-rate reimbursement. When questioned during this audit, the Technology Services Coordinator explained the following: The COO drafted a Board executive summary for the presentation of this item, and provided the financial information and the narrative explanation (See Exhibit H). This draft was submitted to the Technology Services Coordinator to upload to BoardDocs while the COO was out of the office on leave. The Technology Services Coordinator felt that the information presented was not accurate, as he was not certain that E-rate would provide reimbursement. He had expressed this previously to the COO, and now felt that he was in an ethical dilemma. He would have to correct the work product of the COO (an administrator who was superior to him) while the COO was absent, and send it to the Board without the COO’s review. The Technology Services Coordinator made a change to the last line of the Background Analysis, with the intent to increase the uncertainty regarding eligibility for E-rate reimbursement, although he still felt that the executive summary was misleading. He did not remove his name from the document, and it was officially submitted under the names of both the COO and the Technology Services Coordinator (See Exhibit J). Prior to the Board meeting, the Technology Services Coordinator voiced his concerns to his current supervisor, and told her that he did not want to be present at the Board meeting because he was not comfortable with the information that would be presented by the COO. His supervisor responded that he should respond to all questions honestly if he were called on to speak. However, although he was scheduled to attend the meeting, at the last moment the COO told him he did not need to be present, and he did not attend. When the COO was questioned about this during this audit, he agreed and recalled that the Technology Services Coordinator had told him that he was not certain that the settlement would be reimbursed by E-rate. When further questioned as to whether he had discussed the potential for reimbursement with the District’s E-rate consultant, the COO responded that he had not, and that he thought he understood the E-rate reimbursements well enough and did not feel it was necessary to discuss the issue with the consultant.

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2. Background Analysis - Board agenda, 7/11/2017 (Exhibit J): There were several errors present in the background analysis of the Executive Summary presented to the Board. The errors are as follows:

• The September 5, 2015 invoice did not inform the District that the Centrex lines were not covered in the 5/12/2015 contract; it was a standard invoice and contained much higher charges, but there was no indication that the lines were not covered in the May contract, as this was not the case. This was simply the first invoice received by the District that charged out-of-contract rates for Centrex lines. (See Exhibit P)

• The total billed for the AT&T invoices in question was $689,659.32. The amount of $744,016.26, incorrectly presented on the Board agenda, was the total amount due on January 1, 2016, and represented both disputed and undisputed outstanding charges.

• The services are not reimbursable by E-rate.

3. In his presentation to the Board at the 7/11/2017 meeting, the COO indicated that “we did not realize” that the Centrex lines were not included in the contract that was approved on May 13, 2015. The audit found evidence to the contrary, in that there were at least 5 documented reminders from AT&T to the Technology Services Coordinator, after the 5/12/2015 contract was approved, that the Centrex contract would expire on June 30, 2015 (Exhibit D). It is clear that the District had been made aware that those contracts were to be handled separately. Additionally, the Board agenda for the 5/12/2015 contract indicated an annual cost of $36,758.40 for services (Exhibit G); it would be unusual to have expected that the Centrex lines were included in this contract, as this was less than one-tenth of the typical annual cost of Centrex lines.

4. Regarding the 10/13/2015 AT&T contract: Administrative Regulation 460R(2) – Contract Approval states the following: “When submitting the contract for Board approval, the contract and Contract Review Form 4.60R(2)E(1)) must be attached to the Board agenda item.” (Exhibit M) A Contract Review Form was not attached to the Board agenda item, and there is no evidence that the form was utilized; as such, it is unclear who the Contract Review Officer was for this contract. Furthermore, the “workflow” in Board Docs (which normally lists the names of all who approved the agenda item) is blank for this item; this indicates that the 10/13/2015 contract was placed directly on Board Docs such that approval was not requested or required for this item. The only individuals who had the necessary software permissions to add items without using the workflow were the COO and the Board Coordinator. Thus, the 10/13/2015 contract did not flow through the 4.60(R) contract approval process. It also should be noted that an email has been presented by the COO to Internal Audit, showing that the contracts were emailed to the Administrative Assistant in the Legal department on Thursday, 10/8/2015, prior to the Tuesday (10/13/2015) Board meeting. This email had several contracts attached, but there was no text in the email (and thus no stated request for Legal review. See Exhibit Q). Lori Hoadley, General Counsel, was out of the office from 10/3 – 10/9, and she did not receive a copy of this email prior to the Board meeting. In discussing this audit, the COO stated to Internal Audit that it was normal practice “back in the day” to have his Administrative Assistant send this type of email to the Administrative Assistant in the Legal Department, and was considered “running it by Legal” for review.

5. The District Legal department was not involved in the negotiation and settlement of the disputed charges, and was only brought in for legal review in advance of the Board meeting.

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6. In response to questions from the Board, the COO stated that the reason that the Legal department was not involved in the settlement process was because the District utilized the services of the E-rate consultant. When the E-rate consultant was contacted during this audit and questioned about the services he provided, he responded that his only involvement was to make a phone call. He was not involved in negotiations, attended no meetings, and was not aware of the contract settlement amount. (See Exhibit F) Additionally, the Technology Services Coordinator was not involved in the settlement agreement; all negotiations were handled by the COO.

CONCLUSION Payment has been made by the District to AT&T for the amount of the settlement approved at the 7/11/2017 Board meeting. AT&T has confirmed that payment was received, and that both the payment and the AT&T adjustment will be reflected on the invoice to be received on or around September 5, 2017. District payment to AT&T: $ 344,829.66 AT&T adjustment: $ 344,829.66 Total account adjustment: $ 689,659.32 There will be no further payments due from the District for this situation. The total additional cost incurred by the District for failure to timely renew the Centrex contracts is estimated at $264,829.66. CORRECTIVE ACTION Recommendations are as follows:

1. All District contracts should follow Administrative Guidelines, and all related paperwork and forms should be submitted as required. This provides the managerial involvement and oversight necessary to properly manage contracts and renewals, and would provide some assurance that contract issues are appropriately identified in a timely manner, so that contracts may be renewed prior to expiration.

2. A formal process should be developed for recording and tracking existing contracts, and for identifying and handling the need for new contracts. There should be a centralized mechanism and record-keeping system for this process, so that the District does not rely solely on the individuals that work with these contracts to remember and handle them. The Operations department is already working on such a process. It is recommended, however, that the District develop an entity-wide process for contract tracking and management.

3. All contract settlements and disputes should be brought to the Legal department for review and counsel at the beginning of the process.

4. The responsibility sharing for telecom services should be discussed and formalized between the Operations department and Technology Services.

5. All information presented to the Board should be carefully vetted for integrity and accuracy.

This report will be forwarded to Human Resources for appropriate action.

From: Christina EuhusTo: Lori HoadleyCc: Christina EuhusSubject: FW: RE: September 2015 AT&T Bill - Please Respond ASAPDate: Wednesday, July 19, 2017 12:50:50 PM

-----Original Message-----From: Bill Hull [mailto:[email protected]]; Sent: 9/15/2015 1:14:24 PMTo: Stacie Talbert Scott [mailto:[email protected]]; CC: Dana Woods [mailto:[email protected]]; Dan Woestman[mailto:[email protected]]; Subject: RE: September 2015 AT&T Bill - Please Respond ASAP

Hi Stacie,

I'm not aware of any additional services or changes that would result in this. I will need tolook at a copy of the bill.

Thanks,Bill

From: Stacie Talbert ScottSent: Tuesday, September 15, 2015 1:11 PMTo: Bill HullCc: Dana Woods; Dan WoestmanSubject: September 2015 AT&T Bill - Please Respond ASAP

Hi Bill,

Accounts Payable brought to my attention the monthly AT&T bill that’s normally in the$40k - $50k range is $343,000 this month. Since this bill is 7x higher than the normal bill,I am request you supply us with a rationale/reasoning as to what services the Districtreceived above and beyond the normal monthly services that would result in such a largeincrease in the bill. The locations on the bill that we need a detailed rationale for are:Board of Education: $195,587.09East High School: $100,846.79Guilford High School: $32,889.36

We are needing to submit payment today. So please respond with sufficient informationas to what additional services we received.

In the future, if you will be getting services apart from the normal phone service, youmust enter a purchase requisition prior to having the services completed.

EXHIBIT A




Thank you,

Stacie Talbert Scott, MBAExecutive Director of Budget and PurchasingRockford Public Schools501 7th St., 6th FloorRockford, IL 61104-1221Phone: 815-966-3097, Internal: 16240Fax: [email protected]

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EXHIBIT A


http://www3.rps205.com/lets-talk/Pages/Finance.aspx

http://www3.rps205.com/lets-talk/Pages/Technology.aspx

http://www3.rps205.com/lets-talk/Pages/Legal.aspx

AT&T Account 831‐000‐2923‐200 Cost Comparison

Actual

Calculated,

"Should Have Been"

Invoice Date Services for FY2014 FY2015 FY2016 FY2016 FY2017

August 5 July 54,721.19 49,582.05 42,644.61 42,644.61 27,177.47

September 5 August 55,262.34 58,117.38 343,053.93 30,000.00 28,111.15

October 5 September 58,506.23 57,594.35 165,069.20 30,000.00 28,027.64

November 5 October 57,234.31 57,553.42 181,536.19 20,000.00 18,859.26

December 5 November 57,837.83 57,507.31 18,399.82 18,399.82 16,192.22

January 5 December 59,362.36 57,126.33 1,740.80 1,740.80 16,605.46

February 5 January 57,624.49 24,341.46 27,485.17 27,485.17 18,173.52

March 5 February 47,414.05 (57,882.46) 27,110.16 27,110.16 13,285.31

April 5 March 52,152.75 44,474.19 28,473.61 28,473.61 15,264.37

May 5 April 51,572.26 43,627.35 28,760.79 28,760.79 12,759.26

June 5 May 51,936.08 44,812.34 28,468.84 28,468.84 13,895.27

July 5 June 51,421.51 43,216.97 27,888.76 27,888.76 12,377.68

655,045.40 480,070.69 920,631.88 310,972.56 220,728.61

Total Costs Incurred for FY2016, including contract renewal failure: 920,631.88

Total Costs Estimated for FY2016, had contract renewed properly: 310,972.56 Estimated unnecessary additional expense due to contract renewal failure: 609,659.32

Amount of charges disputed (for services provided in August/September/October of 2015): 689,659.32

Final agreed‐upon settlement: 344,829.66

Estimated charges August/September/October, had contract been renewed in time: 80,000.00 Estimated additional expense incurred, due to contract renewal failure: 264,829.66

EXHIBIT B

Date From To Text

2/11/2015, 10:46 amDonna

MannersBill Hull

Bill,

Our records indicated that some of your services were not covered for the whole e‐rate year, in which case we put them back out on a form 470. Glenn

questioned the 470 and Jerry responded to him.

Please see Glenn's email and the answers Jerry gave to him. Hopefully it will make sense. Thank you, Donna

2/11/2015, 2:29 pm Bill Hull Glenn Shine

Hey Glenn,

Can you send me the renewal paperwork for the expiring services? Am I reading this correct that it includes ISDN? I thought we just renewed that. If so,

we'll need to talk SIP again. Thanks! Bill

2/11/2015, 2:41 pm Glenn Shine Bill Hull

Bill:

Will forward in a few ‐ the only expiring ones are the Centrex. The MDA (Local Usage) and LD are fine, as they expire 6/30/16 (not 2/2016 as Jerry

thought) ‐ we're providing him a document on those that he requested.

We do need to discuss the SIP as the cost savings are quite substantial ‐ I know you have a lot to tackle internally, but we should keep discussing. All mg

other Erate customers are migrating and doing via the service substitution process for Erate. Let me find the Centrex agreements and forward. Glenn

Shine

2/11/2015, 4:55 pm Glenn Shine

Bill Hull

(forwarded to

Todd Schmidt

9/23/2015)

Bill:

Attached are the 4 applicable Centrex pricing schedules and Erate Rider. Please review and advise if any questions.

Here is what I need returned:

1. Please print each Pricing Schedule and 1 Erate Rider PER agreement (So, 4 Erate Riders).

2. Please have all signed and dated.

3. Please then return 4 SEPARATE DOCUMENTS: EACH DOCUMENT SHOULD BE 1 PRICING SCHEDULE AND 1 ERATE RIDER

Thanks. Glenn Shine

4/15/2015, 3:23 pmJerry

Steinberg

Jerze Plewa,

Donna Manners,

Bill Hull

Good afternoon Mr. Plewa‐

It was nice talking with you earlier about the Rockford 205 PIA review.

Please find attached my response to your questions.

Basically we agree that Comcast Internet services were duplicated and asked for one of the FRNs to be cancelled.

Secondly was the acknowledgement that there were duplicative FRNs for PRI service and for SIP/MIS services. Those FRNs are included and with an

explanation that we filed for both PRI service and SIP trunks for the entire year as we have no confidence that AT&T (the selected service provider) can

deliver its SIP service by July 1, 2015 or even by January 1, 2016 (for that matter).

So in our response I have asked for both the PRI FRN and the SIP trunks/MIS FRN to be filed for the entire year as we have it on our 471 Forms AND the

customer (copied here) will notify us right away when the new SIP service is installed so that we can cancel the PRI lines and stop E‐rate funding on the

PRI FRN.

Please review the attached response and let me know of any questions anytime.

Thank you and regards, Jerry

4/16/2015, 12:01 pm Jerzy Plewa

Jerry Steinberg,

Donna Manners,

Bill Hull

Mr. Steinberg,

Please see attached for a letter with follow up questions. Please note FRNs 2779038 and 2812617/2812652 are still considered duplicates(local/ld

distance and SIP circuits providing the same function, I did have the FRNs correct the first time around for those) . Item II is a new question regarding

FRNs 2779059 and 2812617/2812652(SIP/PRI duplicates).

Please let me know if you have any questions

Sincerely, Jerzy

EXHIBIT C

EXHIBIT C

Date From To Text

4/17/2015, 6:24 amJerry

Steinberg

Bill Hull, Donna

Manners

Good morning Bill‐

Hope all is going well.

We need to talk about the attached follow up letter from the E‐rate reviewer on your local, PRI and SIP trunks. Basically, the first PIA Audit Review letter

stated that he felt the Centrex and Local services were "duplicative" (their word) with the new SIP trunks.

I countered by saying NO that the SIP trunks were duplicative with the PRI lines. His new letter continues to say that the Centrex and local services on

471 # 1023832 FRN 2779038 are duplicative with the SIP trunks on 471# 1033711 (FRNs 2812617 and 2812652).

Presently, the PRIs are independent of the Centrex and local lines and that continued working independently of the local lines is what is intended with

the new SIP trunks, as well.

So, we/you,please need a "convincing" response to the auditor telling him a) that the local and Centrex lines are used by the schools as integral parts of

the telephone system and for other ancillary services and b) work independent of the present PRI lines today or the proposed SIP trunks.

Whatever answer we provide to the auditor/reviewer must be accurate and would be verified if an on‐site audit were conducted, as happened a few

years ago.

In this new letter, he has come back with a need to have a due date for "Over‐lapping" services. We talked about this and had agreed that the PRI lines

could be scheduled for service from 7‐1‐2015 to 9‐30‐2015 and the SIP trunks from 9‐1‐2015 to 6‐30‐2016. Please let me know if that is still correct. I

tried to explain on the telephone and in writing that the confidence level is not great of getting the SIP trunks installed by a specific date. I asked for full

funding for both the PRI lines and the SIP trunks. Obviously, he didn't accept that answer.

Please call me (630‐240‐3056) to review and discuss.

Best regards, Jerry


The other countersigned agreement.

Will be starting to initiate orders next week and will have several questions.

Glenn

5/21/2015, 3:55 pm Bill Hull Glenn Shine ?Thanks! I'm still working on the Centrex contract. It looks like there was confusion when SIP was 2 contracts. Bill


Yea ‐ I think there are like 4 separate accounts, and thus 4 agreements. And each one needs a Rider.

Thanks. Glenn

5/29/2015, 6:41 am Glenn Shine Bill Hull

Bill:Just checking in on status of Centrex contracts given the expiration date of 6/30/15. Let me know at your convenience - thanks.

6/11/2015, 10:08 amGlenn Shine BillBill: Just checking in for any status on these contracts. Thanks. Glenn

6/18/2015, 7:23 am Glenn Shine Bill HullBill: Just checking in for any status on these contracts. Thanks.

6/18/2015, 9:21 am Bill Hull Glenn Shine Glenn, Sorry for the delay. It was never sent to our board so it'll be a couple of weeks. Thanks, Bill

6/19/2015, 6:42 am Glenn Shine Bill HullBill: Thanks. Just so you know they do expire 6/30/15.

6/26/2015, 7:37 am Glenn Shine Bill HullBill: Just following up since we're coming close to the end of the month.

EXHIBIT C

Date From To Text

7/21/2015, 6:45 am Glenn Shine Bill HullBill: Checking in for any status/update. Thanks.

9/15/2015, 1:11 pmStacie

Talbert Scott

Bill Hull, Dana

Woods, Dan

Woestman

Hi Bill,

Accounts Payable brought to my attention the monthly AT&T bill that’s normally in the $40k ‐ $50k range is $343,000 this month. Since this bill is 7x

higher than the normal bill, I am request you supply us with a rationale/reasoning as to what services the District received above and beyond the normal

monthly services that would result in such a large increase in the bill. The locations on the bill that we need a detailed rationale for are:

• Board of Education: $195,587.09

• East High School: $100,846.79

• Guilford High School: $32,889.36

We are needing to submit payment today. So please respond with sufficient information as to what additional services we received.

In the future, if you will be getting services apart from the normal phone service, you must enter a purchase requisition prior to having the services

completed.

Thank you,

9/15/2015, 1:14 pm Bill Hull

Stacie Talbert

Scott, Dana

Woods, Dan

Woestman

Hi Stacie, I'm not aware of any additional services or changes that would result in this. I will need to look at a copy of the bill.

Thanks, Bill


Bill:I wanted to advise you that Melissa and I noticed a huge spike in the billing for Rockford School District. We are trying to identify the issue and then resolve, but when you receive the latest invoice(s), please let us know so we can address. Thanks.

9/30/2015, 3:11 pm Bill Hull Glenn ShineHi Glenn, A very scary invoice arrived on my desk today. Thanks, Bill

9/30/2015, 3:12m Glenn Shine Bill Hull

Bill: We just found out the "cause". These invoice(s) are for the Centrex accounts - remember, the contracts were never signed and they expired. In order to address, we need those Centrex agreements signed very quickly as they are tariffed services. Thanks.


I suspected that was the case. Our new contract procedure is very complicated but we're expediting. Hopefully we'll have a signed contract after our next board meeting. Thanks,Bill

12/7/2015, 9:35 am Bill Hull Glenn Shine

Hi Glenn, I assume this is the Centrex account which saw the massive increase because of the contract. Do you know if the rates were adjusted after we

executed the contract?

Thanks, Bill

EXHIBIT C

Date From To Text


Bill:

Left you voice message as well. Contracts were implemented and effective with the signature date. I did engage and am working with our Erate

resources and Legal resources to understand if we can re‐rate back to July ‐ just do not know yet. As I receive any updates, I'll advise. I do recommend

paying some of the charges (anything that may not be Centrex related, as I believe it's all on a consolidated account/invoice). If you continue to receive

messages/inquiries, make sure you refer them to Melissa Gomez and myself. Thanks.

Glenn Shine

12/9/2015, 8:54 am Glenn Shine Bill Hull

Bill:

Quick update. Had an internal call with our Erate specialist and Legal to review the below. Our Erate specialist (Ricardo Tostado) will be reaching out to

Jerry to discuss further too given all the Erate implications ‐ Ricardo knows Jerry very well. Possibly more to follow. Glenn Shine


Bill:

Heard back from my internal Erate resource and he did review with Jerry. Long story short, may have a funding concern for the period of time the

Centrex fell of contract. We did follow all the Erate guidelines, so from a process perspective, AT&T did all correctly. Good news is that the contracts are

implemented and the contract rates are in effect for any Centrex lines still remaining.

The issue is that the Centrex accounts are on the Consolidated account and that has not been paid for a few months ‐ very large outstanding balance.

Can you advise on next steps when the invoices will be addressed and paid? I need to advise Legal, as well as our Receivables group so they understand

the District's intentions on next steps.

Let me know at your convenience. Thanks. Glenn Shine


Glenn, Please call me to discuss. 815‐988‐2193.

Bill


Bill:

I'll call you tomorrow. Thanks.

Glenn

7/17/2017, 7:59 pm Cindy Nelson Glenn Shine

Howdy

Hope all is well. Question ‐ can you please give me information about any contracts we have with you and when they will expire? Anything that gives us

special pricing.

Thank you

Cindy

7/18/2017, 6:44 am Glenn Shine Cindy Nelson

These are the existing contracts:

1. Complete Link: Pricing for POTs and local usage on Centrex and POTs. 6/30/18

2. Centrex: 6/30/18

3. Long Distance (HVCP): 6/30/18

4. Managed Internet: $ 6/30/19

5. IP Flex and Managed Internet: 6/30/18

Glenn Shine

EXHIBIT C

From: Christina EuhusTo: Lori HoadleyCc: Christina EuhusSubject: FW: RE: Centrex ContractsDate: Wednesday, July 19, 2017 12:31:29 PM

-----Original Message-----From: SHINE, GLENN R [mailto:[email protected]]; Sent: 6/11/2015 10:08:44 AMTo: Bill Hull [mailto:[email protected]]; Subject: RE: Centrex Contracts

Bill:

Just checking in for any status on these contracts.

Thanks.

Glenn Shine

Strategic Account Lead 3

AT&T Business Global Solutions

Work: 630-718-1569

AT&T Work Voice: 331-201-7647

Cell: 847-913-7908

Email: [email protected]

RETHINK POSSIBLE

Would you like to receive a discount on your personal wireless bill every month? Employeesof state and local government, K12 school and universities may qualify for discounts onpersonal wireless service from AT&T. To sign up for new service and receive your discountas well as an instant $25 online coupon visit www.att.com/governmentemployees orwww.wireless.att.com/college and enter your email address for more info.

Already an AT&T customer? Add the discount quickly at www.wireless.att.com/discounts

EXHIBIT D





http://www.att.com/governmentemployees

http://www.wireless.att.com/college

http://www.wireless.att.com/discounts

Roman.Gray

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From: SHINE, GLENN R Sent: Friday, May 29, 2015 6:41 AMTo: Bill Hull ([email protected])Subject: Centrex Contracts

Bill:

Just checking in on status of Centrex contracts given the expiration date of 6/30/15. Let meknow at your convenience – thanks.

Glenn Shine

Strategic Account Lead 3

AT&T Business Global Solutions

Work: 630-718-1569

AT&T Work Voice: 331-201-7647

Cell: 847-913-7908


RETHINK POSSIBLE

Would you like to receive a discount on your personal wireless bill every month? Employeesof state and local government, K12 school and universities may qualify for discounts onpersonal wireless service from AT&T. To sign up for new service and receive your discountas well as an instant $25 online coupon visit www.att.com/governmentemployees orwww.wireless.att.com/college and enter your email address for more info.



EXHIBIT D


http://www.att.com/governmentemployees

http://www.wireless.att.com/college

http://www.wireless.att.com/discounts


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From: Christina EuhusTo: Lori HoadleyCc: Christina EuhusSubject: FW: RE: Centrex ContractsDate: Wednesday, July 19, 2017 12:40:33 PM

-----Original Message-----From: SHINE, GLENN R [mailto:[email protected]]; Sent: 7/21/2015 6:45:08 AMTo: Bill Hull [mailto:[email protected]]; Subject: RE: Centrex Contracts

Bill: Checking in for any status/update. Thanks.

Glenn ShineStrategic Account Lead 3AT&T Business Global SolutionsWork: 630-718-1569AT&T Work Voice: 331-201-7647Cell: 847-913-7908Email: [email protected]

RETHINK POSSIBLEWould you like to receive a discount on your personal wireless bill every month? Employees of state and local government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up for new service and receive your discount as well as an instant $25 online coupon visit www.att.com/governmentemployees or www.wireless.att.com/college and enter your email address for more info.Already an AT&T customer? Add the discount quickly at www.wireless.att.com/discounts

-----Original Message-----From: SHINE, GLENN R Sent: Friday, June 26, 2015 7:37 AMTo: 'Bill Hull'Subject: RE: Centrex Contracts

Bill: Just following up since we're coming close to the end of the month.

Thanks much.



-----Original Message-----From: SHINE, GLENN R

EXHIBIT D




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Sent: Friday, June 19, 2015 6:42 AMTo: Bill HullSubject: RE: Centrex Contracts

Bill: Thanks. Just so you know they do expire 6/30/15.



-----Original Message-----From: Bill Hull [mailto:[email protected]] Sent: Thursday, June 18, 2015 9:21 AMTo: SHINE, GLENN RSubject: RE: Centrex Contracts

Glenn,

Sorry for the delay. It was never sent to our board so it'll be a couple of weeks.

Thanks,

Bill

________________________________From: SHINE, GLENN R <[email protected]>Sent: Thursday, June 18, 2015 7:23 AMTo: Bill HullSubject: RE: Centrex Contracts

Bill: Just checking in for any status on these contracts.

Thanks.

Glenn ShineStrategic Account Lead 3AT&T Business Global SolutionsWork: 630-718-1569AT&T Work Voice: 331-201-7647Cell: 847-913-7908Email: [email protected]<mailto:[email protected]>

RETHINK POSSIBLEWould you like to receive a discount on your personal wireless bill every month? Employees of state and local government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up for new service and receive your discount as well as an instant $25 online coupon visit www.att.com/governmentemployees<http://www.att.com/governmentemployees> or www.wireless.att.com/college<http://www.wireless.att.com/college> and enter your email address for more info.Already an AT&T customer? Add the discount quickly at

EXHIBIT D

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www.wireless.att.com/discounts<http://www.wireless.att.com/discounts>

From: SHINE, GLENN RSent: Friday, May 29, 2015 6:41 AMTo: Bill Hull ([email protected]<mailto:[email protected]>)Subject: Centrex Contracts

Bill:Just checking in on status of Centrex contracts given the expiration date of 6/30/15. Let me know at your convenience - thanks.

Glenn ShineStrategic Account Lead 3AT&T Business Global SolutionsWork: 630-718-1569AT&T Work Voice: 331-201-7647Cell: 847-913-7908Email: [email protected]<mailto:[email protected]>

RETHINK POSSIBLEWould you like to receive a discount on your personal wireless bill every month? Employees of state and local government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up for new service and receive your discount as well as an instant $25 online coupon visit www.att.com/governmentemployees<http://www.att.com/governmentemployees> or www.wireless.att.com/college<http://www.wireless.att.com/college> and enter your email address for more info.Already an AT&T customer? Add the discount quickly at www.wireless.att.com/discounts<http://www.wireless.att.com/discounts>

Ask a question, share a comment or make a suggestion on Let's Talk!<http://www3.rps205.com/lets-talk/Pages/Technology.aspx>


EXHIBIT D


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Roman Gray

From: Christina EuhusSent: Wednesday, July 19, 2017 12:29 PMTo: Lori HoadleyCc: Christina EuhusSubject: FW: RE: COUNTERSIGNED AT&T Contract for <ROCKFORD SCHOOL DISTRICT 205>

-----Original Message----- From: SHINE, GLENN R [mailto:[email protected]]; Sent: 5/21/2015 3:56:49 PM To: Bill Hull [mailto:[email protected]]; Subject: RE: COUNTERSIGNED AT&T Contract for

Yea - I think there are like 4 separate accounts, and thus 4 agreements. And each one needs a Rider.

Thanks.

Glenn Shine Sr. Account Manager GEM-SI - AT&T Business and Home Solutions Office: 630-718-1569 Cell: 847-913-7908 Email: [email protected] RETHINK POSSIBLE Would you like to receive a discount on your personal wireless bill every month? Employees of state and local government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up for new service and receive your discount as well as an instant $25 online coupon visit www.att.com/governmentemployees or www.wireless.att.com/college and enter your email address for more info. Already an AT&T customer? Add the discount quickly at www.wireless.att.com/discounts

-----Original Message----- From: Bill Hull [mailto:[email protected]] Sent: Thursday, May 21, 2015 3:55 PM To: SHINE, GLENN R Subject: RE: COUNTERSIGNED AT&T Contract for <ROCKFORD SCHOOL DISTRICT 205>

?Thanks! I'm still working on the Centrex contract. It looks like there was confusion when SIP was 2 contracts.

Bill

________________________________ From: SHINE, GLENN R <[email protected]> Sent: Thursday, May 21, 2015 3:52 PM To: Bill Hull Subject: FW: COUNTERSIGNED AT&T Contract for <ROCKFORD SCHOOL DISTRICT 205>

The other countersigned agreement.

EXHIBIT D

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Will be starting to initiate orders next week and will have several questions.

Glenn Shine Sr. Account Manager GEM-SI - AT&T Business and Home Solutions Office: 630-718-1569 Cell: 847-913-7908 Email: [email protected]<mailto:[email protected]> RETHINK POSSIBLE Would you like to receive a discount on your personal wireless bill every month? Employees of state and local government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up for new service and receive your discount as well as an instant $25 online coupon visit www.att.com/governmentemployees<http://www.att.com/governmentemployees> or www.wireless.att.com/college<http://www.wireless.att.com/college> and enter your email address for more info. Already an AT&T customer? Add the discount quickly at www.wireless.att.com/discounts<http://www.wireless.att.com/discounts>

Ask a question, share a comment or make a suggestion on Let's Talk!<http://www3.rps205.com/lets-talk/Pages/Technology.aspx>


EXHIBIT D

1

Roman Gray

From: Jerry Steinberg <[email protected]>Sent: Friday, July 21, 2017 2:57 PMTo: Roman GraySubject: Re: RPS #205, e-rate and AT&T contract

Good afternoon Roman-

It also was good to talk with you this morning.

Please see my answers below.

--

Jerry

Jerry Steinberg Senior Consultant Telesolutions Consultants, LLC 108 S. Third Street, Suite #3 Bloomingdale, IL 60108-2912 P: 630.351.6200|Mobile: 630-240-3056 e-mail: [email protected]

On Fri, Jul 21, 2017 at 12:16 PM, Roman Gray <[email protected]> wrote:

Hi, Jerry – It was good talking to you this morning, and thank you for the information. Has any of our team here at the District discussed those issues with you recently? After talking with some people here, I had come to understand (though incorrectly) that we WERE going to receive a full e‐rate reimbursement (70%) on these costs. I met with the RPS team on March 1, 2017 to review a fed E‐rate audit, and I believe we briefly discussed the lapsing of the AT&T contract and that AT&T claimed they were not going to back off their position.

Based on my conversation with you today, I now understand that we will not receive any reimbursement beyond what we already have received. Did Todd Schmidt, Bill Hull, or anyone else contact you to determine the likelihood of us receiving e‐rate reimbursement on these costs?? No, not that I can recall. I don't remember talking about E‐rate discounts or the possibilities of using E‐rate toward the over‐charges by AT&T. I would have said that E‐rate wouldn't pay toward overcharges.

EXHIBIT E

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By costs, I am referring to the settlement that we are paying to AT&T for exhorbitant costs charged to the District for out‐of‐contract rates for 3 months in 2015. I understand‐ they are exorbitant.

Jerry

____________________

Roman Gray, CIA, CFE

Internal Auditor

Rockford Public Schools

From: Jerry Steinberg [mailto:[email protected]] Sent: Thursday, July 20, 2017 2:53 PM To: Roman Gray Subject: Re: RPS #205, e-rate and AT&T contract

Good afternoon Roman-

I have been away the past two days on family time and meetings.

You can try to call me after 3:15 p.m. today or try tomorrow morning.

My cell phone is 630-240-3056.

It has a generic voice mail that you can leave a message on to call you back IF I am not available.

Thanks and regards,

--

EXHIBIT E

3

Jerry

Jerry Steinberg Senior Consultant Telesolutions Consultants, LLC 108 S. Third Street, Suite #3 Bloomingdale, IL 60108-2912 P: 630.351.6200|Mobile: 630-240-3056 e-mail: [email protected]

On Wed, Jul 19, 2017 at 1:31 PM, Roman Gray <[email protected]> wrote:

Jerry,

I’m the Internal Auditor at the Rockford Public School District #205, and am working on figuring out the details of an AT&T contract snafu we had here recently. I believe that you’ve been working with Todd Schmidt or Bill Hull on this, and I’d like to talk with you on the phone, if possible, to understand any implications that the settlement of this issue may have with our e-rate reimbursement.

Is there a good time that I can call and catch you?

BEST REGARDS,

Roman Gray, CIA, CFE

Internal Auditor

Rockford Public Schools

501 7th St., 3rd Floor

Rockford IL 61104

P: 815-489-0539

M: 815-985-6070

Ext. 16675 (Internal)

EXHIBIT E

1

Roman Gray

From: [email protected]: Thursday, July 27, 2017 9:28 AMTo: Roman GraySubject: Re: RPS #205, e-rate and AT&T contract

Roman-

I was not involved in any negotiations with AT&T of the dispute, save for my promised phone call to/with the AT&T Midwest area manager for her help on the dispute/overcharge.

She told me that the issue was being directed by their Washington DC lawyers and that dismissal of the overcharges was not forthcoming. Normally, disputes would be solved by local management.

The first time I saw the amounts of the charges was the other day in one of your E-mails.

I understand that there was a meeting or meetings with AT&T and Rockford 205. I was not present and I had no separate meetings regarding the charges.

So, my involvement was limited. I tried to resolve it (unsuccessfully) with a phone call.

Jerry

Jerry Steinberg Telesolutions Consultants LLC BLoomingdale, IL.

Sent from my iPhone

On Jul 27, 2017, at 9:15 AM, Roman Gray <[email protected]> wrote:

Jerry – Again, thank you for your information.

Can you tell me how you were involved in the District’s settlement of the disputed charges related to this contract expiration and failure to renew? Todd Schmidt has told me several times, and stated to the Board in his presentation, that our E‐rate consultant was involved in helping to get this dispute settled.

____________________ Roman Gray, CIA, CFE Internal Auditor Rockford Public Schools

From: Jerry Steinberg [mailto:[email protected]] Sent: Tuesday, July 25, 2017 1:47 PM To: Roman Gray Subject: Re: RPS #205, e-rate and AT&T contract

EXHIBIT F

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7/21/2017 BoardDocs® Plus

https://www.boarddocs.com/il/rps205/Board.nsf/Private?open&login# 1/2

Agenda Item Details

Public Content

Meeting May 12, 2015 - Rockford Public School District No. 205 Board Meeting Agenda

Category 16. *Action Items

Subject B. AT&T Telephone Service (SIP) - Mr. Todd Schmidt

Access Public

Type Action (Consent)

Preferred Date Apr 28, 2015

Absolute Date Apr 28, 2015

Fiscal Impact Yes

Budgeted Yes

Budget Source Fund 20

RecommendedAction

Administration recommends the Board of Education approve the AT&T SIP service contract.

SUBMITTED BY:Dr. Dan Woestman, Assistant Superintendent of AccountabilityTodd Schmidt, Chief Operations OfficerBill Hull, Technology Services Coordinator

A. BACKGROUND ANALYSIS

As part of the yearly eRate process the District filled a from 470 for local and long distance service. Currently theseservices are delivered via analog ISDN Prime circuits at a cost of $5,838.10/mo. The recommend proposal replaces theoutdated analog service with Internet based SIP service at a cost of $3,063.20. AT&T was the only respondent for therequested service.

B. EDUCATIONAL IMPACT STATEMENT

N/A

C. STRATEGIC PLAN COMPATIBILITY STATEMENT

N/A

D. STATUTE, BOARD POLICY OR RULE STATEMENT

N/A

E. FISCAL IMPACT STATEMENT

The proposed yearly expenditure of $36,758.40 is captured in the FY16 budget and is eRate reimbursable at an 80%discount level. With eRate discount, the Districts yearly cost is $7,351.68.

F. IMPLEMENTATION AND ASSESSMENT PLAN

ADMINISTRATION' S RECOMMENDATION

EXHIBIT G


https://www.boarddocs.com/il/rps205/Board.nsf/Private?open&login# 2/2

Administrative Content

The regular order of business may be suspended upon consent of 2/3s of the members present. Board Policy Manual, subsection2.220

*Items requiring Roll Call Vote

**Administration is requesting suspension of the rules to allow action to take place at the first reading of this item.

The Administration recommends that the Board of Education approves the contract with AT&T for $36,758.40.

ATT 2015 Signed contract.pdf (7,341 KB) ATT 1.pdf (4,022 KB) ATT 2.pdf (4,761 KB)

SIP Plan 04232015.pdf (174 KB)

EXHIBIT G

https://www.boarddocs.com/il/rps205/Board.nsf/files/APCM3J5075E0/$file/ATT%202015%20Signed%20contract.pdf

https://www.boarddocs.com/il/rps205/Board.nsf/files/9VRR8C55ECBD/$file/ATT%201.pdf

https://www.boarddocs.com/il/rps205/Board.nsf/files/9VRR8U55F025/$file/ATT%202.pdf

https://www.boarddocs.com/il/rps205/Board.nsf/files/9VV7VU75CFA0/$file/SIP%20Plan%2004232015.pdf

EXHIBIT H

This is the draft of the 7/11/2017 Board agenda as created by the COO. It was later edited by the Technology Services Coordinator and subsequently edited by the CFO for minor changes for grammar and clarity.


N/A


Approval of the AT & T release and settlement agreement between AT&T Corp. and Rockford School District.

EXHIBIT H


1/2

Agenda Item Details

Public Content

Meeting Jul 11, 2017 - Rockford Public School District No. 205 Board Meeting Agenda

Category 10. *Other Consent

Subject C. AT&T Settlement Agreement - Telecommunication Services

Access Public

Type Action

Preferred Date Jul 11, 2017

Absolute Date Jul 11, 2017

Fiscal Impact Yes

Dollar Amount 344,829.66

Budgeted Yes

Budget Source Fund 20

RecommendedAction

Administration recommends the Board of Education approve the AT & T release and settlementagreement between AT&T Corp. and Rockford School District 205 related to Centrex lines.

SUBMITTED BY:

Todd Schmidt, Chief Operations OfficerBill Hull, Technology Services Coordinator


On May 12, 2015, the Board approved a service change to replace outdated analog telecommunications services with Internet based Session Imitation Protocol (SIP) service. The District believed the remaining Centrex lines were included in the new contract.

On the September 5, 2015, AT&T invoice, the District was informed the Centrex lines were not covered under the new contract approved on May 12, 2015, and subsequently the Administration presented to the Board of Education and received approval on October 13, 2015, for a renewal contract for Centrex services related to the remaining Centrex lines. As a result of the Centrex services not being under contract, AT&T reverted to the standard tariffed services billing rate for the District's billing between September 5, 2015 through December 7, 2015 (service dates of July 5, 2015 to October 15, 2015). This resulted in AT&T billing the District $744,016.26 for Centrex services.

The Administration has disputed the charges and recently reached an agreement in the amount of $344,829.66 for Centrex services during the timeframe of July 5, 2015 to October 15, 2015, invoiced from September 5, 2015 through December 7, 2015.

The services are reimbursable at the E-rate discount percentage of 70%.


N/A


The recommendation is consistent with Goal 3: Optimal Climate “Ensure a productive and satisfying climate for learning and teaching” and Strategy 5: Facilities & Technology.


https://www.boarddocs.com/il/rps205/Board.nsf/Private?open&login

EXHIBIT J

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The recommendation is consistent with Policy 4.10: Fiscal and Business Management.


The proposed estimated expenditure of $344,829.66 for the services is reimbursable at the E-rate discount percentage of 70%resulting in a net cost of $103,448.90.


N/A


Administration recommends the approval of the AT & T release and settlement agreement between AT&T Corp. and Rockford School District.

Rockford School District Release.pdf (149 KB)

EXHIBIT J

https://www.boarddocs.com/il/rps205/Board.nsf/files/AP2M3A593771/$file/Rockford%20School%20District%20Release.pdf

Transcript – July 11, 2017

Agenda item 10C – AT&T Settlement Agreement

Question

Mrs. Makulec: I’m not blind siding him I sent questions in earlier, so I just had some concerns as to how

we get there and how I thought it would be here - important for you to have a conversation or an

explanation. Tell us what happened why are we paying $300,000 - $344,000 which is a whole lot less

than $750,744.

Mr. Schmidt: That’s payment of, what we’ll do is we’ll get 70% of that is eligible for reimbursement

under the e-rate process so the net expenditure of that is a little over $100,000. When we had this with our telco lines, we had some old Centrex lines out there that we brought forward in a new contract back in I believe May of 2015. The intent was to port some of those Centrex over to our new contract that we’re looking at with the SIP network where some of those were not included. We did not realize that they were not included in there until we received a bill, the September 5th bill which Finance received

on September 11th that stated that the initial two months of July and August was about $340,000 some

odd dollars then once that was brought to our attention we started working with AT&T to trying to

figure out what happened and why these contracts, why these lines were not included in our old

contract or ones that we discontinued why weren’t they in there. So we worked on that. Once we

realized that AT&T wasn’t going to budge, they weren’t on the new contract we brought the Centrex

contract to the Board on October 15th. These are lines that we were currently using. They just went off

the contract rate to a higher rate. AT&T was trying to put them up there for those four months, the

$744,000, so no it should be back down here to about the $300,000 where we’re at right now. We filed

a dispute with them, they weren’t going to budge on it, we got our E-Rate consultant involved with this,

they talked to the VP of AT&T. Through past practice they would they would sit there even if it was

under contract that little lapse of coverage they would back rate it back to the contract rate, so basically

we would have been covered under our contract rate but AT&T wasn’t going to budge on that, but then

after the consultant got involved in that, then through some of the talking with them they decided to

bring it back down from that $744,000 back down to about $300,000 some odd dollars. So these are

actually lines we were using they were just off a different contract pricing out there.

Mrs. Makulec: So if I’m understanding this, we entered into a new contract with Centrex, we didn’t

include these lines. We’re still using AT&T lines we had to pay for them during that time?

Mr. Schmidt: This is all AT&T lines. The Centrex is a type of service that we were having. We had a lot of

those services out there, we’re kinda migrating into a different type of service in May and we were going

to port or bring these over into that and that not all of them got brought into that like we thought,

anticipated. So it’s still AT&T service it was either using a Centrex line or with our new SIP lines up there.

Mrs. Makulec: So who writes up the, I guess I’m kinda looking for a process piece here. Who writes up

the contract to make sure those lines are included? Where did that fall down happen?

EXHIBIT K

Mr. Schmidt: Based off the e-rate. Just like all…

Mrs. Makulec: from who the State?

Mr. Schmidt: No this is from the USAC – if you sit out there, if you look at the bills that you pay for your

individual phone bills and telephone, there’s a little tax that you pay out there that kinda gets put into a

pool. So that pool is divvied out there based usually based on free and reduced lunch out there, but we

kinda qualify a little higher. So based on that you get reimbursement from your internet connection,

your fiber network, your cell phones, telecommunications services and then also every two years out of

five years you can get reimbursement for switches, routers, wireless access points, and things like that.

So it’s a combination out there from the Universal Service, that’s USAC U-S-A-C that they put this in a

pool and you can apply for those e-rate funding and get reduced telephone services out there. The

whole intent out there when they started this out, I don’t know, maybe 15 years ago, was to provide

internet connections to schools. So that’s why when we have our fiber connections, which the Board has

approved a couple of these before, we’re getting anywhere from 80-90% of our data connections or

internet connections reimbursed based off this USAC this e-rate process.

Mrs. Makulec: And all the money we’ve applied for and told we’re going to get we get?

Mr. Schmidt: hmm. Yep. They keep stating they might change it but we’ve been getting it. There’s a

couple services things that they’re starting decreasing a little bit, but I believe that’s on the cell phone

but that’s very minimal compared to other telcos. Our telcos we have about $1MM a year that we

expend out.

Mrs. Makulec: So I guess again from a governance and process stand point how would we do it

differently so we’re not in this situation?

Mr. Schmidt: Well what did back then, those finances came in, and actually, there was, in 2015 they

were on the system they were just going to pay that. Those bills back then where nobody was looking at

them, they would come into Finance and they would pay for them. We’ve changed that process out

Mr. Schmidt: From my department and the IT Department with Mr. Woestman and Mr. Hull, us three

at that time back in 2015 and working with our sales rep from AT&T.

Mrs. Makulec: And then going to the e-rate person, what did our legal counsel suggest that we do to

deal with this process?

Mr. Schmidt: We did not discuss the process going out there. We were using our e-rate consultant,

that’s why we pay them. They’ve been do this quite often with us and we were going through the

process with them.

Mrs. Makulec: So I’m understanding that Legal was not involved at all or was not even aware that this

was happening. So that’s a process question too. So current, so we have to pay for the use of these for

that period of time and you just negotiated it down and you’re saying that 70% of that will be refunded

to us.

EXHIBIT K

there. Now we have two individuals, one in my department, Operations Planner, who looks at all of our

utility bills and works with our e-rate consultant and then an individual in the IT Department to make

sure that when we get the bills in there, make sure that per the contract, make sure the pricing is

correct, make sure that when we give the bills to our e-rate consultant to put in for the reimbursement

on the e-rate, that we’re only including eligible services out there, because there’s other services that

don’t qualify for that reimbursement. So we’ve had that in place for a little bit over a year right now that

we’re actually looking at these contracts, making sure that okay we’ve approve the rate here here’s the

bills that come in and making sure they line up. Because we’re also finding individuals were adding some

phone lines in the District and we didn’t know about them.

Mrs. Makulec: So if you back up, that’s what you do after you have a contract and you’re paying the bills

and you’re seeing that you’re but if you back up another step putting together a contract to make sure

that we have the right things and not depending on a vendor who we’re leaving or whether… The AT&T

piece sounds like they didn’t give us a complete…

Mr. Schmidt: Yes, part of this is when we started looking at, now we know exactly what’s out there ,

now we know where our lines at, we’ve got them tracked out there, so as we migrate off there. With the

Centrex lines it’s kinda off because we’ve reduced it. We probably had about 3,000 we’re down to under

900 now, actually we’re going be down right about 600. Looking at our big things out there with our

fiber connections, our SIP network, our ISDN, everything with our Telco, we have those all detailed out

there exactly what we want, so we know moving forward, you know, this has been a process we’ve been

working on the last two years, to make sure we document every single thing that we have out there

even the phone lines that we have in the elevator, that when we start creating a contract for new

service, when the time comes up for that, we have everything documented, we know exactly, okay, this

is what we have, this is what we want, and crosswalk those, and put it out for the RFP on the 470.

EXHIBIT K



Agenda Item Details

Public Content


Meeting Oct 13, 2015 - Rockford Public School District No. 205 Board Meeting Agenda

Category 9. *Recurring Contracts

Subject G. AT&T Contract - Mr. Todd Schmidt

Access Public

Type

SUBMITTED BY:Todd Schmidt, Chief Operations OfficerBill Hull, Technology Services Coordinator


Currently the District utilizes 900 Centrex lines for telecommunication services District wide. The proposed renewal contract is fora period of 36 months in conjunction with the Districts erate filings. The services will be reimbursed at the erate percentageof 70%.


N/A


The recommendation is consistent with Goal 3: Optimal Climate “Ensure a productive and satisfying climate for learning and teaching”and Strategy 5: Facilities & Technology.


The recommendation is consistent with Policy 4.10: Fiscal and Business Management.


The proposed estimated expenditure of $450,000, less 70% erate reimbursement $ 315,000, is captured in the Boardapproved FY16 budget. The Districts net cost is $135,000.


N/A


Approval of the AT & T renewal contract.

ATT 10-13-2015.pdf (6,728 KB)

EXHIBIT L

https://www.boarddocs.com/il/rps205/Board.nsf/files/APCVRV652571/$file/ATT%2010-13-2015.pdf






EXHIBIT L

ROCKFORD PUBLIC SCHOOLS Issued: 6/2/15

ADMINISTRATIVE REGULATION Regulation 4.60R(2)

Responsible: Chief Financial Officer

REGULATION MANUAL Board Policy 4.60

Regulation – Purchases and Contracts Approved: _____/s/ Ehren Jarrett___________

Superintendent

Endorsed: _____/s/ Lori L. Hoadley_________ General Counsel

OPERATIONAL SERVICES

Contract Approval and Review

1. General

This procedure designates who, within the School District, is authorized to sign contracts

on behalf of the School District and sets forth the approval / review process.

Contracts may be signed on behalf of the School District only by:

The School Board

The President of the School Board (as witnessed by the Secretary of the School

Board)

The Superintendent

The Purchasing Department

2. Contract

For the purposes of this administrative procedure, a "contract" is defined as a written

agreement between two (2) parties intended to have legal effect, including Grants,

Memorandums of Understanding, Memorandums of Agreement, Nondisclosure

Agreements, and Letters of Understanding, in one of the following forms listed below:

Documents signed by the School District and another party

Offers (including bids) accepted by and signed by the School District

Certain pre-approved School District forms signed by others

Contract forms promulgated by others signed by the School District

2.1 Contract Requirements

Contracts are required for the following:

Consulting services (Note: If the contract is for consulting services, then such

services may not be provided by a current employee.)

Software purchases in excess of $10,000 in any fiscal year

Single projects involving the construction, renovation, repair maintenance or

remodeling of School District property where such project is in excess of $50,000

in any fiscal year

EXHIBIT M

2

Services provided by Architects, Engineers, Project Managers, or Program

Managers which exceed $50,000 in any fiscal year

Intergovernmental Agreements

Real estate purchases or leases

3. Signature Authority and Delegation

School District administrators have authority to sign contracts concerning academic

matters (e.g., student teaching, affiliation agreements with partner entities such as

Rockford Memorial Hospital, Swedish American Hospital, Wesley Willows) not

involving the expenditure of School District funds.

The School District has a centralized system of signature authority where it involves the

expenditure of School District funds. In general, the School Board has delegated general

signature authority to the President, the Superintendent and the Purchasing Department.

Although under limited circumstances the Superintendent may further delegate that

authority, such delegations require written permission from the Superintendent and

should be used only when necessary and not defeat the centralized intent of this

administrative procedure.

All delegations shall be to a position within the School District and not to the individual

holding the position at the time of the delegation. When there is turnover in a position,

the new individual has the authority of the previous incumbent.

As specified below, all contracts which require the School District to expend funds must

be reviewed by the Purchasing Department and/or General Counsel, prior to signature.

4. Contract Review

Each contract must be carefully reviewed by the School District employee initiating the

contract.

All of the below required contracts must be reviewed by General Counsel for legal form:

Consulting services (Note: If the contract is for consulting services, then such

services may not be provided by a current employee.)

Software purchases in excess of $10,000 in any fiscal year

Single projects involving the construction, renovation, repair maintenance or

remodeling of School District property where such project is in excess of $50,000

in any fiscal year

Services provided by Architects, Engineers, Project Managers, or Program

Managers which exceed $50,000 in any fiscal year

Intergovernmental Agreements

Real estate purchases or leases

All other contracts involving the expenditure of School District funds must be reviewed by the

Purchasing Department.

EXHIBIT M

3

5. School District Employee Initiating the Contract

The person initiating the contract for the School District is responsible for reading the

contract entirely and determining that:

the contract language accurately reflects the current state of negotiations;

the contract meets programmatic and School District mission requirements;

the contract represents a good deal for the School District;

the contract defines measurable deliverables;

he or she can ensure compliance with the obligations it places on the School

District;

safety and risk management concerns have been reasonably addressed; and

the contract is sufficiently clear and consistent.

5.1.

If the contract is with an individual or entity who has previously provided similar goods

and/or services to the School District, then, the person initiating the contract must include

data from the prior contract demonstrating successful completion of the prior contract for

services and/or goods.

If the contract is for consulting or professional services, then the person initiating the

contract must evaluate and verify the qualifications and credentials of the consultant or

professional before engaging his/her services.

If the contract is a service level agreement, then the person initiating the contract should

utilize Exhibits 4.60R(2)E(4) and 4.60R(2)E(5) when negotiating the terms of the

agreement.

After being satisfied with the form and content of the contract, the initiating employee

must complete the appropriate sections of the Contract Review Form (Exhibit

4.60R(2)E(1)). To the extent the initiating employee does not understand the proposed

contract, or is uncomfortable with any of its provisions, he or she should note that

information on the Contract Review Form or attach an explanatory memo. He or she shall

submit the contract along with any other necessary documents, such as a copy of the

purchase requisition where required, to the appropriate contract review officer for

processing. Contract review officers for each area of specialty within the School District

are listed on the Contract Review Form. The initiating department should submit a

purchase requisition, if required, into the system for approval; however a purchase order

will not be processed until the signed contract and the Contract Review form is received

by the Purchasing Department.

When submitting the contract for Board approval, the contract and Contract Review

Form (Exhibit 4.60R(2)E(1)) must be attached to the Board agenda item. In addition, the

original contract signed by the vendor, must be given to the Recording Secretary for the

Board prior to the meeting at which the Board will take action.

Contract Amendments

Any material changes to contracts will be processed in the same manner as the original

contract and must indicate which contract they pertain to.

EXHIBIT M

4

5.2. Legal Form

General Counsel shall ensure that:

the contract language is consistent with state and federal law;

the contract language is consistent with Board Policy and administrative

procedures (including this administrative procedure);

any provision indicating the venue and/or applicable law identifies “Illinois” as

the venue and/or applicable law;

there is reasonable internal consistency and clarity in the contract terms; and

there is consistency with any predecessor documents and/or attachments.

5.3.

5.4.

5.5.

Other Institutional Reviews

The Purchasing Department shall determine what other institutional reviews are

necessary prior to submission of the contract for signature, indicate these reviews on the

form, and coordinate obtaining the appropriate reviews. In particular, the Purchasing

Department is responsible for making sure that departments which will be obligated or

otherwise affected by the performance of a contract have an adequate opportunity to

review the contract. The routing for particular types of contracts will generally be

established by the person with signature authority. The contract review officer will

coordinate the reviews and then forward the contract to the person with signature

authority.

Contract Review Form

Contracts submitted for signature must be accompanied by a Contract Review Form

(Exhibit 4.60R(2)E(1)). Individuals reviewing the proposed contract prior to its signature

(execution) shall sign the Contract Review Form indicating that they have reviewed it,

and what they reviewed it for. The Contract Review Form will normally have at least two

(2) signatures consisting that of the initiating employee (originator), and that of a contract

review officer.

Approval and Signature (Execution) of Contract on Behalf of School District

The person initiating the contract is responsible for obtaining the required signatures.

If a contract or a series of contracts requires an expenditure of $10,000 or more in any

fiscal year, then the contract must be Board approved. Once the internal review is

complete, the person initiating the contract is responsible for obtaining Board approval.

To be placed on the Board Consent Agenda as a “Recurring Contract,” the contract must

meet the following criteria: (1) the Board previously approved a contract; (2) with the

same vendor; (3) for the same or similar services and/or products; and (4) the lapse in

time from the expiration date of the prior contract does not exceed 24 (twenty-four)

months. Furthermore, in order to be considered a “Recurring Contract,” there must be

supporting data of successful completion of prior contractual obligations and such data

must be summarized in the executive summary which supports the Administration’s

recommendation.

EXHIBIT M

5

Employment contracts, collective bargaining agreements and memorandas of

understanding modifying the collective bargaining agreements require Board approval

and, as such, shall be placed on the Board agenda under “Other Consent.”

The administrator initiating the contract is responsible for appointing a School District

employee as the Contract Administrator to be responsible for tracking and monitoring

contract performance in accordance with Administrative Procedure ____ (“Contract

Monitoring").

6. Form Contracts

The Purchasing Department may adopt procedures authorizing the execution of pre-

approved Purchase Order forms.

7. Compliance

No School District employee may sign (execute) any contract purporting to be on behalf

of the School District, unless delegated signature authority to do so, pursuant to this

administrative procedure. Any employee who violates this section may be subject to

disciplinary action. No contract signed by a person without written signature authority

delegated by the School Board or Superintendent shall be binding on the School District.

8. Records Retention

The assigned Contract Administrator shall keep the signed contract on file or designate

where the signed contract should be kept. The contract will be kept on file for at least

the period of the contract plus three (3) years or the period of time required by law,

whichever is longer. If signed contracts are sent to a different location, a log should be

kept describing the contract and indicating where it was sent.

9. Attachments

Exhibit 4.60R(2)E(1) – Contract Review Form

Exhibit 4.60R(2)E(2) – Contract Documentation Checklist

Exhibit 4.60R(2)E(3) – Contract Documentation Form

Exhibit 4.60R(2)E(4) – Service Level Agreements

Exhibit 4.60R(2)E(5) – Service Level Agreement Checklist

EXHIBIT M

1

Operational Services

4.60R(2)E(1) Exhibit – Contract Review Form

The employee initiating the contract must complete the appropriate sections of this form, and

send it with the contract to the Purchasing Department for processing. To the extent the initiating

employee does not understand the proposed contract, or is uncomfortable with any of its

provisions, he or she should note that information on the Contract Review Form or attach an

explanatory memo.

Certificate of Employee Initiating Contract

Date: ________________________ School District PREQ Number: ______________________

Parties to the

Contract:______________________________________________________________________

Short Description:

______________________________________________________________________________

______________________________________________________________________________

Contract Term: ________________________ Amount: ____________________________

Assigned Contract Administrator: ___________________ Title __________________________

Except as indicated in any attached memorandum: I have read this contract entirely, understand

all its provisions, believe that it meets programmatic and School District mission requirements,

believe that it represents a good deal for the School District, defines measurable deliverables, and

take responsibility for complying with the terms of the contract within the bounds of my

authority. The document is internally consistent and clear. I am also satisfied with the description

of the School District’s obligations and with the description of any goods or services to be

provided by or to the School District. Any risk management concerns have been reasonably

addressed. A memorandum ____is ____is not attached. To the extent the contract requires an

outlay of funds, the funds are available. I either have the authority to obligate the funds or have

approval from someone who does.

Compliance with this contract will require the cooperation of, or otherwise impact on, the

following departments or positions:

______________________________________________________________________________

EXHIBIT N

2

_____________________________________________________________________________

________________/_________________________________________________/___________

Date/Signature/Position

Cabinet Member Certificate (if above party is not a Cabinet Member)

I concur with the above certification.

________________/_____________________________________________________________

Date/Signature

General Counsel Review (required for all agreements involving consulting services; software

purchases in excess of $10,000 in any fiscal year; services provided by Architects, Engineers,

Project Managers, or Program Managers which exceed $50,000 in any fiscal year;

Intergovernmental Agreements, real estate purchases or leases)

I have reviewed this contract and it does not contain any legally prohibited provisions, includes

all legally or administratively required provisions, is basically consistent and clear, and is not

otherwise objectionable on legal or administrative grounds, to the best of my knowledge and

abilities. I have indicated below any other reviews necessary prior to execution of this contract.

________________/_____________________________________________________________

Date/Signature

Comments:

______________________________________________________________________________

______________________________________________________________________________

Chief Financial Officer or Designee Review (required for all contracts over $10,000)

The contract is reviewed to ensure it complies with generally accepted accounting principles;

will not result in unallowable expenditures under federal and state regulations or Board Policy;

and is not otherwise unallowable with respect to fund group, account number, or other existing

Budget expenditure or receipt requirements.

________________/_____________________________________________________________

Date/Signature

Comments:

______________________________________________________________________________

______________________________________________________________________________

EXHIBIT N

3

Chief Academic Officer or Designee Review (required for all software contracts)

________________/_____________________________________________________________

Date/Signature

Comments:

______________________________________________________________________________

______________________________________________________________________________

Other Reviews Recommended:

By:___________________________________For:____________________________________

Review Performed By:

__________________/___________________________________________________________

Date/Signature

Comments:

______________________________________________________________________________

______________________________________________________________________________

By: ___________________________________For:____________________________________

Review Performed By:

________________/_____________________________________________________________

Date/Signature

Comments:

______________________________________________________________________________

______________________________________________________________________________

EXHIBIT N

Rockford School District Page 1 of 106 201 S MADISON ST Account Number 831-000-2923 200ROCKFORD IL 61104

Billing Date Sep 5, 2015 Questions? 1 888 400-9828

Web Site att.com

Invoice 5828559205AT&T Tax ID 13-4924710

Invoice

Rockford School District Page 1 of 106 201 S MADISON ST Account Number 831-000-2923 200ROCKFORD IL 61104


Web Site att.com

Invoice 5828559205AT&T Tax ID 13-4924710

Invoice

Return bottom portion with your check in the enclosed envelope.

Your Account Amount ToWill be Debited by Sep 30, 2015 Be Debited $343,053.93

Billing Date Sep 5, 2015 Account Number 831-000-2923 200

AT&T P.O. Box 5019 Carol Stream, IL 60197-5019

!601975019129!

83100029232005828559205058200003430539300343053936

Rockford School District

ATTN: Amy Prosise 201 S MADISON ST

ROCKFORD IL 61104

Previous Bill 42,644.61

Payment - Thank You! 42,644.61CR

Adjustments .00

Balance .00

Current Charges 343,053.93

Amount to be Debited $343,053.93

Account will be Debited by Sep 30, 2015

For detailed information of your charges go towww.businessdirect.att.com

Questions? Call: 1 888 400-9828

AT&T Business Services

Group #000012 Beyer Elementary School Sub-Account #831-000-2923 264 198.08

Total Group #000012 198.08

Group #000011 Bloom School Sub-Account #831-000-2923 251 96.37Sub-Account #831-000-3132 835 46.99

Total Group #000011 143.36

Group #000013 Board of Ed Sub-Account #831-000-2923 245 103.62Sub-Account #831-000-2923 272 195,587.09

Total Group #000013 195,690.71

Group #000014 City of Rcfr Bd of Ed Sub-Account #831-000-2923 249 621.29Sub-Account #831-000-2923 253 46.99Sub-Account #831-000-2923 254 46.99Sub-Account #831-000-2923 255 48.27Sub-Account #831-000-2923 256 58.39Sub-Account #831-000-2923 260 47.02Sub-Account #831-000-2923 270 44.56Sub-Account #831-000-2923 271 46.99

Total Group #000014 960.50

Group #000015 East High School Sub-Account #831-000-2923 252 100,846.79

Total Group #000015 100,846.79

Group #000016 Fairview Sub-Account #831-000-2923 258 94.49

Total Group #000016 94.49

Group #000017 Guilford High School Sub-Account #831-000-2923 248 528.45Sub-Account #831-000-2923 259 32,889.36

Total Group #000017 33,417.81

Group #000018 Jackson School Sub-Account #831-000-2923 266 198.08

Total Group #000018 198.08

Group #000019 Jefferson High School Sub-Account #831-000-2923 261 97.00Sub-Account #831-000-2923 279 203.14

Total Group #000019 300.14

Group #000020 Leadership & Learning Academy Sub-Account #831-000-2923 283 283.95Sub-Account #831-000-2929 465 96.35

Total Group #000020 380.30

Group #000021 RESA Middle School Sub-Account #831-000-2923 262 100.24

Total Group #000021 100.24

Group #000022 Rockford Bd Ed Sub-Account #831-000-2923 250 345.32Sub-Account #831-000-2923 269 18.72Sub-Account #831-000-2923 274 46.99Sub-Account #831-000-2923 278 46.99Sub-Account #831-000-2923 280 46.99Sub-Account #831-000-2923 282 58.39Sub-Account #831-000-2923 228 17.03

Total Group #000022 580.43

Group #000023 Rockford Bd Ed Fl 1 Sub-Account #831-000-2923 238 575.76

Total Group #000023 575.76

Group #000024 Rockford Envn Science Academy Sub-Account #831-000-2923 233 529.89

Total Group #000024 529.89

Group #000025 Rockford Middle School Sub-Account #831-000-2923 257 48.03


Group #000026 Rockford Public School Dist Sub-Account #831-000-2923 234 732.30Sub-Account #831-000-2923 240 712.26

Total Group #000026 1,444.56

Group #000027 Rockford Public School Dist205Sub-Account #831-000-2923 229 540.27Sub-Account #831-000-2923 230 535.42Sub-Account #831-000-2923 231 810.49Sub-Account #831-000-2923 232 527.64Sub-Account #831-000-2923 273 48.18

Total Group #000027 2,462.00

Group #000028 Rockford Public Schools Sub-Account #831-000-2923 235 756.93Sub-Account #831-000-2923 236 967.33

EXHIBIT P

Rockford School District Rockford School District Page 2 of 106 201 S MADISON ST Account Number 831-000-2923 200ROCKFORD IL 61104


Web Site att.com

Group #000028 Rockford Public Schools Sub-Account #831-000-2923 237 692.96Sub-Account #831-000-2923 244 310.42

Total Group #000028 2,727.64

Group #000029 Rockford Schl Dist Sub-Account #831-000-2923 241 2,019.69Sub-Account #831-000-2923 284 240.94

Total Group #000029 2,260.63

Group #000030 Welsh School Gas Meter Sub-Account #831-000-2923 267 94.49


Total Current Charges 343,053.93

Group #000012 Beyer Elementary School

Sub-Account #831-000-2923 264 8159622976304 Charges for 8159622976304 8159622976 Local Service Recurring Charges:Aug 1, 2015 thru Aug 31, 2015 1. Line Charge 73.00 2. Federal Access Charge 5.91Sep 1, 2015 thru Sep 30, 2015 3. Line Charge 73.00 4. Federal Access Charge 5.91One Time Charges:Service Order: R9050448424 5. Prorated amount 7.73

Jul 2, 2015 Total Local Service 165.55Surcharges and Other Fees 6. STATE INFRASTRUCTURE MAINTENAN .84 7. STATE ADDITIONAL CHARGES .15

8. IL UNIVERSAL SERVICE FEE 1.58 9. 9-1-1 EMERGENCY SYSTEM BILLED 1.00

10. FEDERAL UNIVERSAL SERVICE FEE 2.02Total Surcharges and Other Fees 5.59TaxesOther: 11. FEDERAL AT 3.0% 5.01 12. MUNICIPAL TELECOMMUNICATIONS T 10.0613. ILLINOIS AT 7.0% 11.73 14. IL TELECOM RELAY SVC AND EQP .14Total Taxes 26.94Total 8159622976304 198.08Total Sub-Account #831-000-2923 264 198.08Total Group #000012 198.08

Group #000011 Bloom School

Sub-Account #831-000-2923 251 8152290520108 Charges for 8152290520108 8152290520 Local Service Recurring Charges:Aug 16, 2015 thru Sep 15, 2015 15. Monthly Charges 73.00 16. Federal Access Charge 5.76Aug 18, 2015 thru Jul 1, 2016 17. Discount for MDA SLD - 1MB for Bill Period Aug 16, 78.99CR

2015 Total Local Service .23CRSurcharges and Other Fees18. STATE INFRASTRUCTURE MAINTENAN .41 19. STATE ADDITIONAL CHARGES .0720. IL UNIVERSAL SERVICE FEE .69 21. 9-1-1 EMERGENCY SYSTEM BILLED 1.00 22. FEDERAL UNIVERSAL SERVICE FEE 2.60Total Surcharges and Other Fees 4.77TaxesOther: 23. FEDERAL AT 3.0% 2.38 24. MUNICIPAL TELECOMMUNICATIONS T 4.87 25. ILLINOIS AT 7.0% 5.68 26. IL TELECOM RELAY SVC AND EQP .14Total Taxes 13.078152290531 Local Service Recurring Charges:Aug 16, 2015 thru Sep 15, 2015 27. Monthly Charges 73.00 28. Federal Access Charge 5.76Total Local Service 78.76Total 8152290520108 96.37Total Sub-Account #831-000-2923 251 96.37

Sub-Account #831-000-3132 835 8159687256485 Charges for 8159687256485 8159687256 Local Service Recurring Charges:Aug 22, 2015 thru Sep 21, 2015 29. Line Charge 73.00 30. Federal Access Charge 5.76Aug 25, 2015 thru Jul 1, 2016 31. Discount for MDA SLD - 1MB for Bill Period Aug 22, 39.49CR

2015 Total Local Service 39.27Surcharges and Other Fees 32. STATE INFRASTRUCTURE MAINTENAN .20 33. STATE ADDITIONAL CHARGES .03 34. IL UNIVERSAL SERVICE FEE .35 35. 9-1-1 EMERGENCY SYSTEM BILLED .50 36. FEDERAL UNIVERSAL SERVICE FEE 1.30Total Surcharges and Other Fees 2.38TaxesOther: 37. MUNICIPAL TELECOMMUNICATIONS T 2.43 38. ILLINOIS AT 7.0% 2.84 39. IL TELECOM RELAY SVC AND EQP .07Total Taxes 5.34Total 8159687256485 46.99Total Sub-Account #831-000-3132 835 46.99Total Group #000011 143.36

Copyright 2015 AT&T Intellectual Property. All Rights Reserved.

EXHIBIT P

EXHIBIT Q

Thanks.

Glenn Shine

Sr. Account Manager

GEM-SI -AT&T Business and Home Solutions

Office: 630-718-1569

Cell: 847-913-7908


RETHINK POSSIBLE

Would you like to receive a discount on your personal wireless bill every month? Employees of state and local

government, K12 school and universities may qualify for discounts on personal wireless service from AT&T. To sign up

for new service and receive your discount as well as an instant $25 online coupon visit

www.att.com/governmentemployees or www.wireless.att.com/college and enter your email address for more info.


-----Original Message----

From: SHINE, GLENN R

Sent: Wednesday, February 11, 2015 2:41 PM

To: 'Bill Hull'

Subject: RE: Rockford School D istrict: Erate 470

Bill:

Will forward in a few - the only expiring ones are the Centrex.

The MDA (Local Usage) and LD are fine, as they expire 6/30/16 (not 2/2016 as Jerry thought) - we're providing him a

document on those that he requested.

We do need to discuss the SIP as the cost savings are quite substantial - I know you have a lot to tackle internally, but we

should keep discussing. All mg other Erate customers are migrating and doing via the service substitution process for

Erate.

Let me find the Centrex agreements and forward.

Glenn Shine

Sr. Account Manager

GEM-SI -AT&T Business and Home Solutions

Office: 630-718-1569

Cell: 847-913-7908


RETHINK POSSIBLE




www.att.com/governmentemployees or www.wireless.att.com/college and enter your email address for more info.


2

EXHIBIT Q

-----Original Message-----

From: Bill Hull [mailto:[email protected]]

Sent: Wednesday, February 11, 2015 2:29 PM

To: SHINE, GLENN R

Subject: RE: Rockford School District: Erate 470

Hey Glenn,

Can you send me the renewal paperwork for the expiring services? Am I reading this correct that it includes ISDN?

thought we just renewed that. If so, we'll need to talk SIP again.

Thanks!

Bill

From: Donna Manners <[email protected]>

Sent: Wednesday, February 11, 2015 10:46 AM

To: Bill Hull

Subject: Fwd: Rockford School District: Erate 470

Bill,

Our records indicated that some of your services were not covered for the whole e-rate year, in which case we put them

back out on a form 470. Glenn questioned the 470 and Jerry responded to him.

Please see Glenn's email and the answers Jerry gave to him. Hopefully it will make sense.

Thank you,

Donna

---------- Forwarded message ----------

From: Jerry Steinberg <[email protected]<mailto:[email protected]»

Date: Sat, Jan 31, 2015 at 11:44 AM


To: Glenn Shine <[email protected]<mailto:[email protected]»

Cc: Donna Manners <[email protected]<mailto:[email protected]»

Good morning Glen

Hope all is going well.

Donna asked me to answer you as best as I can.

Here goes in Brown below:

3 EXHIBIT Q

Please let me know of any questions.

Thanks,

Jerry

Jerry Steinberg

Senior Consultant

Telesolutions Consultants, LLC

108 S. Third Street, Suite #3

Bloomingdale, IL 60108- 2912

P: 630.351.6200<tel:630.351.6200> I

e-mail: <mailto:[email protected]>

Jerry@<mailto:[email protected]><mailto:[email protected]>telesolutionsconsulta

nts.com<http://telesolutionsconsultants.com/> --------- - Forwarded message----------

From: Donna Manners <[email protected]<mailto:[email protected]»

Date: Fri, Jan 30, 2015 at 10:01 PM


To: Jerry Steinberg <[email protected]<mailto:[email protected]» ---------- Forwarded message ----------

From: SHINE, GLENN R <[email protected]<mailto:[email protected]»

Date: Fri, Jan 30, 2015 at 10:55 AM

Subject: Rockford School District: Erate 470

To: Donna Manners <[email protected]<mailto:[email protected]»

Donna:

I received notification of the recent 470 filed for Rockford SD and have a few questions.

1. Local Usage agreement and Long Distance agreement in place. We show both local/Centrex and LD being only

until 2/2016 so not covering the whole year. In that case, we needed to place it out there on a 470 form.

2. Looks like Centrex may be expiring this year and waiting for confirmation back from my team. That's what we have

(we could be wrong) but have filed it on the 470 as we have the contract ending 2/2016.

3. For the following 2, are these new requirements? Looks like Internet services being requested for 2 locations. We

were sent two new bills so we are placing these services on a 470 for the 2015/2016 year.

Burstable Internet

Monthly service at 50Mbps download - 25Mbps upload to Auburn HS, 5110 Auburn St., Rockford, IL 61101

Burstable Internet

Monthly service at 50Mbps download - 25Mbps upload to Operations Service Center, 1907 Kishwaukee St., Rockford, IL

61104

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EXHIBIT Q

4. Internet services required at these 2 addresses:Please provide an Internet quote for these two non-AT&T services.

Thank you.

Direct Fiber Optic Internet Access

Two (2) total Internet access service lines at 100Mbps to terminate at the old District Office and at Jefferson HS

District Office Address

201 S. Madison St., Rockford, IL 61104

Jefferson HS Address

4145 Samuelson Rd., Rockford, IL 61109

5. The Internet circuit at District office is under current agreement and not expiring. Is another Internet circuit

required at District Office per the below? Please provide a quote for this non-AT&T Internet line. Thank you.

Direct Fiber Optic Internet Access

Internet access at 200Mbps to terminate in MDF/server room of District Office, located at 501 7th St., Rockford, IL

61104

Thanks.

Glenn Shine

Sr. Account Manager

GEM-SI - AT&T Business and Home Solutions

Office: 630-718-1569<tel: 630-718-1569>

Cell: 847-913-7908<tel:847-913-7908>

Email: [email protected]<mailto:[email protected]>

RETHINK POSSIBLE




www.att.com/governmentemployees<http://www.att.com/governmentemployees> or

www.wireless.att.com/college<http://www.wireless.att.com/college> and enter your email address for more info.

Already an AT&T customer? Add the discount quickly at

www.wireless.att.com/discounts<http://www.wireless.att.com/discounts>

5

EXHIBIT Q

____________________________________________________________________________ To: Roman Gray, CIA, CFE Lori Hoadley, General Counsel Ehren Jarrett, Superintendent From: Heidi Dettman, Executive Director of Academics cc: Bill Hull, Tech Coordinator; Nicole Thorn, Chief Financial Officer Date: September 27, 2017 Re: Internal Audit Communication Response In response to the audit conducted in August 2017 as well as the suggested corrective solutions, the Technology Department will commit to the following:

1. Clarification on contract approval procedures, including a two-page guidance document with embedded policy and action steps has been provided to Bill Hull to ensure that procedural guidelines have been reinforced. Deadlines for approval have also been provided to ensure enough time for proper vetting of contracts.

2. In anticipation of a formal process for contract recording and tracking which can only

come to fruition through a collaborative design involving several departments, IT/IS have created an internal document which outlines the key contracts and their renewal dates, including budgeting information and who manages the contract. As the supervisor of IT/IS, I will continue to develop this with the coordinators of each department.

3. A meeting has been set up to formalize roles and responsibilities as related to

telecommunications. That meeting is set to occur on October 6, 2017 from 11 a.m. - 12 p.m.. . The outcome will be a document owned by all which delineates key responsibilities in on-going management of telecommunications.

Ms. Nicole L. Thorn

Chief Financial Officer

815.966.3063 Phone 815.972.3409 FAX

[email protected] Email

To: Roman Gray, CIA, CFE

Lori Hoadley, General Counsel Ehren Jarrett, Superintendent

From: Nikki Thorn, Chief Financial Officer Cc: Todd Schmidt, COO, Heidi Dettman, Executive Director of Academics Date: October 11, 2017 Re: Internal Audit Communication Response In response to the internal audit regarding the AT&T Telecom Contracts & Cost Settlement dated August 31, 2017 and the related corrective actions noted within the audit document itself, the Operations department and financial services team can commit to the following actions:

1. Clarification and reiteration with the COO and cascading of the clarification to his related operational team regarding contract approval procedures for contracts under $10,000, contracts greater than $10,000 requiring Board of Education approval, and the overall purchasing process procedures for bidding of goods and services within the District. The approval tree for Board Docs has been altered so that the COO does not have the ability to send a contract or other item directly to the Board. The CFO has and will continue to review all proposed contract documents and executive board summaries prior to submission to the Board in any area that reports underneath her purview.

2. A formal process for recording and tracking existing contracts should be expanded District-wide from the current tracking mechanism of an excel spreadsheet that the purchasing department utilizes for tracking of contract renewal for existing bids. Additionally, all contracts should be centrally located with a copy in purchasing, legal, and any that the Board has approved with the Coordinator of the Board. The District-wide tracking mechanism will require extensive collaboration amongst all Chief led departments as it is assumed that there are many existing contracts that have never gone to the Board, may be handled by individuals within departments and unknown to existing leadership, and this initiative as prioritized by the Superintendent and his Cabinet may require additional staffing to accomplish the desired result.

3. All contract settlements will be brought to the legal department and Attorney Hoadley for early review and weigh-in at the beginning of the process.

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4. A meeting was conducted on October 6, 2017 with the following individuals Todd Schmidt, Bill Hull, Heidi Dettman, and myself to gain an understanding of the existing contracts for telecommunications within the District, to specifically define the timelines of these contracts, and to define the on-going management of the various pieces of telecommunications. The roles and responsibilities defined in this meeting can be seen in the attached document.

5. A discussion and reiteration with the COO regarding the importance of properly vetting all information and the accuracy of that information in any communication presented to the Board. If an answer is not definitively known, the response to an inquiry should be that we will research the situation and bring the information back to the Board at a later date.