Inspector
general clears lifting freeze on school
construction
Friday, January 13, 2006 • BY
DUNSTAN McNICHOL • Star-Ledger
Staff
New Jersey's inspector general
recommended yesterday lifting a freeze on new contracts by
the troubled Schools Construction Corp., but said she has
discovered incidents of misconduct and waste so severe a
special investigator should be assigned to monitor the $8.6
billion program.
In her third report on the schools
corporation, the agency set up about three years ago to
manage an $8.6 billion overhaul of public schools across New
Jersey, Inspector General Mary Jane Cooper commended the
program's new managers for implementing a host of reforms to
address her earlier concerns of pervasive
deficiencies.
At the same time, she reported her
ongoing investigation uncovered millions of dollars in
unjustified expenditures on classroom trailers, emergency
generators, change orders and staff expenses for meals and
cars.
In light of those problems, she said, the
SCC has agreed to install an inspector general at the
agency.
"The SCC has made a great deal of
progress since April," said Cooper, who had ordered a freeze
on new construction contracts about a month after her review
was launched last February. "Because new leadership has
proven their commitment to build schools efficiently and
have implemented, or are in the process of implementing, my
recommendation, I have proposed to the Governor that the
agency be able to resume spending on new
contracts."
Kelley Heck, spokeswoman for Gov. Richard
Codey, said the outgoing governor is pleased with the
improvements Cooper noted.
"Certainly, there is more work to be
done," she said after reviewing the report.
Codey assigned Cooper to review the
agency after a Star-Ledger analysis found that six schools
built by the state had cost, on average, 45 percent more
than 19 schools built without state oversight at the same
time. The Star-Ledger revealed that change orders had
boosted construction costs by about 20 percent and that $1
billion in work had been awarded to contracting firms that
were members of a statewide organization whose executive
director chaired the schools corporation's board.
Cooper confirmed those findings in her
first report last April and cited a "wide range of internal
weaknesses" that "make the agency vulnerable to
mismanagement, fiscal malfeasance, conflicts of interest and
waste, fraud and abuse of taxpayer dollars."
Her new report provided details of those
shortcomings.
Cooper described one instance, without
naming the particular employees or company involved, in
which SCC employees were found circumventing agency rules
and "creating misleading documents" to rush $1.6 million in
payments to a private contractor.
"During our investigation, SCC employees
involved in this conduct were not forthcoming and attempted
to mislead the investigation," the report says of the
episode still being investigated.
SCC employees, according to the report,
also skirted state ethics rules by sharing restaurant meals
with private vendors working for the program, who then
passed the costs of the meals on to the state.
Cooper found the SCC has wasted millions
of dollars on emergency generators for dozens of schools
that may not need them and on temporary classroom units, or
classroom trailers, that were bought when not needed and, in
one case, purchased at a premium, then left to sit, unused,
in a field for a year.
The report also says the agency has
documented and claimed credits for at least $263,000 in
office equipment and computers that private construction
management firms on contract to the state bought for
themselves and improperly charged to school construction
projects.
"Because of the numerous issues that have
been raised regarding SCC's past operations, OIG recommends
that SCC create a staff position of Inspector General," the
report concludes. "This position will add confidence that
SCC is operating with fiscal integrity."
The SCC was set up after lawmakers
authorized $8.6 billion to help suburban communities build
schools and to meet a state Supreme Court order for a
state-funded overhaul of decrepit public school buildings in
31 needy communities.
Last year SCC officials revealed the
money was all spoken for, with only 71 of more than 200
proposed schools slated to get built.
In light of the questions surrounding the
SCC's performance, lawmakers declined last year to consider
a bill that would have pumped almost $3 billion into the
program.
Dunstan McNichol covers state government issues. He may
be reached at dmcnichol@starledger.com or (609) 989-0341.
© 2006 The Star-Ledger. Used by NJ.com with
permission.
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