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Outside Investigator: Ex-Scottsdale Schools CFO Did Not Fully Disclose Conflict of Interest

The Scottsdale Unified School District accepted the resignation of its chief financial officer at a special meeting Tuesday.

Laura Smith was placed on administrative leave last week in the wake of a state investigation into alleged conflict of interest.

Smith was a shareholder, director and president of Professional Group Public Consulting, a consulting firm that did work for the district during her tenure as chief financial officer. Her sister Caroline Brackley was also a shareholder.

The district hired outside attorney Susan Segal to investigate. Segal said she believes Smith did not fully disclose her stake in the consulting firm and the conflict of interest agreement she signed shortly after being hired by the district was inadequate.

“She never fully disclosed the substantial interest of her sister Caroline Brackley in any transaction and C, she did not refrain from participating in any manner in such transactions or decisions,” Segal said.

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In interviews with Segal, Smith estimated she had between 15 and 20 percent ownership of the company as of May 2017. She reported she sold her shares in the company at the end of May but was unable to provide Segal with evidence showing she did.

Smith signed off on several financial documents that benefited Professional Group Public Consulting. These included change orders, which increased the amount paid to the firm for existing contracts by $16,042.

Smith said she wasn’t aware the change orders related to Professional Group Public Consulting.

Segal consulted with a former CFO of Mesa Public Schools.

“He said it was inappropriate to sign change orders without knowing who they were being issued to,” Segal said

Segal forwarded her investigation to the state Attorney General’s Office, which is also looking into the district’s operations and expects to complete her final report in the coming week.

Mariana Dale rustles up stories as a senior field correspondent based out of KJZZ’s East Valley Bureau in Tempe. She’s followed a microphone onto cattle ranches, to the Dominican Republic and many places in between. Dale believes in a story’s strength to introduce us to diverse perspectives, inspire curiosity and hold public leaders accountable for their actions. She started at KJZZ on the digital team in 2016 and still spends a lot of time thinking about how to engage with our community online. Dale has learned from stints at Arizona Public Media, The Arizona Daily Star, The Arizona Republic and as an intern at NPR’s Morning Edition in Culver City. She graduated from the University of Arizona with a bachelor’s degree in journalism. Dale is grateful for the mentoring of the New York Times Student Journalism Institute, the Chips Quinn Scholars program and AIR’s New Voices Scholars. A desert native, she loves spending time outside hiking, tending to her cactus and reading.