By George B. Sánchez, Staff Writer. LA NEWSPAPER GROUP/DAILY NEWS
03/26/2009 - An audit detailing Los Angeles Unified's reliance on costly outside consultants to build schools has raised such concern for Superintendent Ramon Cortines that he called in a former bank executive to review the findings.
Cortines asked Bill Siart, former chairman and CEO of First Interstate Bank Corp., to look at the audit, prepared by Inspector General Jerry Thornton, and a defense of the building program by construction chief Guy Mehula.
Siart was not paid for his work. Cortines did not detail the scope or conclusions of his review, but said he would release it Monday.
According to district sources, the audit found that $186 million was paid to 1,277 outside consultants in 2006-07, averaging $145,653 per person that year. The audit's findings mirrored an earlier analysis by the Daily News that found the district spent $182 million on 849 consultants - about $215,000 each - in the 2007-08 year.
While the audit was completed late last month, Cortines said it contained "unsubstantiated" findings and asked Thornton and Mehula to work out their differences.
"I am on top of this," Cortines said. "I have concerns with the report and its content."
School board members are only now getting copies of the audit, which Cortines said he would explain to them on Tuesday.
The inspector general, the district's internal watchdog, said he would not release the report to the media until late next week.
- I have not seen the audit or a draft of the audit. I have not seen Mr, Mehula’s response or a draft of Mr. Mehula’s response. I have not seen Mr. Siart’s review of the audit or a draft of Mr. Siart’s review; this article is the first I have heard of Mr. Siart’s review.
- I am a member of the Bond Oversight Committee which is charged by the State Constitution, the actual language of the bonds from BB through Q, and our charter with the Board of Education with review and oversight of school construction bond expenditures. One would think the BOC would be in this loop …unless there are allegations of BOC mal-or-misfeasance.
- The Inspector General, according to his charter and the District org chart , reports to the Board of Education – not the superintendent.
- The superintendent will release his response – the Siart report – next Monday – and the IG will release his report later in the week? What’s with that?
- Not to over define the definitions but there is a difference between Consultants and Outside Professional Contractors. Mr Siart is a consultant, albeit unpaid. It is my understanding that the subjects of the IG’s report are almost entirely professional contractors.
These are my opinions, not necessarily those of anyone else.
Extra Credit Homework: Google Bill Siart. He was a candidate for Superintendent in 1999 when Cortines was Interim Superintendent and Romer was hired. As Chairman of the Board of ExEd he is a champion-of and advocate-for Charter Schools. The charter school community is currently in a dispute with the Facilities Services Division (FSD) over whether bond funds can be used to build charter schools without FSD and Division of the State Architect (DSA) oversight and inspection – outside the seismic safety of the Field Act. In 2006 Siart wrote OpEd saying that the mayor should have chartering authority – contrary to the state constitution and LAUSD v. Villaraigosa – in which the courts held that city government has no authority in public education.
"I think the board members and superintendent should discuss this and determine if action should be taken," Thornton said. He would not elaborate.
Board President Mónica García declined to comment Wednesday. Tamar Galatzan has a copy of the audit, according to her staff, but has not read it and would not comment.
Other board members did not respond to phone calls.
While the audit details past spending, union officials said it raises questions about the district's current use of outside consultants amid massive cost-cutting and layoff threats.
"If this is what they were doing in '06-07, what were they doing in '07-08 and '08-09?" said A.J. Duffy, president of United Teachers Los Angeles.
Duffy has not read the report.
The district faces a crushing deficit of $718 million over the next 18 months and the specter of mass layoffs, larger class sizes and the elimination of many popular programs.
The teachers union and other labor representatives have called for the district to halt consultant contracts and use that money for teachers and staff, among other demands.
District officials defend the practice, saying consultant contracts ebb and flow with the various stages of construction and have said district wages don't measure up to industry standards.
They add that special consultants are particularly needed to efficiently carry out the nearly $20 billion school construction program.
The Facilities Services Division is in charge of the district's construction program, which has been called the largest public construction program in the country.
The building program has continued apace despite enrollment falling in recent years. District officials say that enrollment fluctuates over the years and they must prepare for anticipated growth in the coming decades.
Last year, consultants constituted nearly 20 percent of the division and accounted for 35 percent of all employee costs. The majority of consultants have been used within two of the division's seven departments: New Construction and Existing Facilities, according to district records.
The district's use of outside consultants has come under fire for years.
"For almost 10 years, we`ve been telling the district that it's a waste of money to use contractors and not district employees," said Connie Moreno, a representative for the California School Employees Association.
"We`ve seen Facilities Division management take work away from district employees and give it to their contractors."
In contrast to consultant wages, the average employee of the facilities division earned about $99,000 in 2007-08, according to district records.
Teamsters local 572 is in arbitration over alleged illegal subcontracting as a result of the district`s use of contractors and outside consultants.