Scathing
report sways planner of new schools
Construction Corp.'s Spencer says
he will heed inspector's findings
Friday, April 22, 2005 • BY DUNSTAN McNICHOL •
Star-Ledger Staff
The head of New Jersey's beleaguered
school construction program agreed yesterday to the
extensive reforms called for in a scathing report by the
inspector general, while lawmakers demanded public hearings
and a criminal probe into evidence that the program has
squandered hundreds of millions of
dollars.
Jack Spencer, chief executive officer of
the Schools Construction Corp., said he plans to meet with
acting Gov. Richard Codey's staff Monday to begin carrying
out the reforms, with an eye toward resuming the stalled
$8.6 billion construction program.
"Like any new start-up program, there are
always growing pains -- lessons to be learned and procedures
that can be done better," Spencer said in a statement
released shortly after his office received the 15-page
report from Inspector General Mary Jane Cooper.
In an interview, he added, "We accept the
recommendations."
The Schools Construction Corp. was set up
2 1/2 years ago to manage a court-ordered overhaul of public
school buildings.
Cooper's two-month review began after The
Star-Ledger reported that schools built by the SCC cost 45
percent more than locally managed school projects. Cooper's
review found "lax and/or non-existent oversight" that left
the corporation vulnerable to "mismanagement, fiscal
malfeasance, conflicts of interest and waste, fraud and
abuse of taxpayer dollars."
The inspector general laid out 10
specific recommendations for shoring up the school-building
program, including hiring a chief financial officer,
retooling its land-acquisition program and scaling back the
role of 13 private project management firms that are
scheduled to collect $462.5 million from the
corporation.
"Today's report confirms that this close
look was warranted and that real changes need to be made
from top to bottom at the Schools Construction Corp.," said
acting Gov. Richard Codey, who directed Cooper in February
to conduct the review. He said he is directing attorneys in
his counsel's office "to begin working with SCC's board of
directors immediately to implement these
recommendations."
Republican lawmakers, meanwhile, called
for a public accounting of the corporation's
miscues.
"There's going to have to be some
consequences for some of the mismanagement that occurred
these last few years," said Assemblyman Kevin O'Toole
(R-Passaic), who asked Attorney General Peter Harvey to
consider a criminal probe into the corporation's dealings.
"The report calls out as to whether this conduct or
malfeasance rises to the level of criminal
activity."
Sen. Tom Kean Jr. (R-Union) called for
public hearings with Senate subpoenas to compel testimony
and documents.
"The preliminary report contains evidence
of gross waste and mismanagement that is so excessive and
widespread as to require an immediate response from the
Legislature," Kean said in a letter to Sen. Ron Rice,
chairman of the Legislature's Joint Committee on the Public
Schools.
Last week, at a hearing before the Joint
Committee, Spencer defended his corporation's track record
and spending, saying allegations of cost overruns and waste
in the program were "misconceptions."
In the preliminary report she delivered
to Codey yesterday, Cooper listed $115 million in specific
questionable expenditures, and she challenged the rationale
for hundreds of millions of dollars more.
"In the early stages of carrying out the
review, we realized that there were areas of inefficiency
and waste in SCC practices," Cooper wrote in her cover
letter to Codey. "All of the recommended changes are
critical, feasible and should be quickly implemented so that
the construction of schools can continue in an efficient,
non-wasteful manner."
Spencer said he hopes that after the
meeting with Codey's staff he will be able to set a
timetable for launching new school projects and approving
change orders to ongoing jobs. Those approvals have been
suspended since March 10, when Cooper first raised concerns
about the SCC spending.
Spencer said some of the inspector
general's recommendations, such as eliminating $227,000 in
bonuses paid to SCC employees in 2003 and 2004 and reviewing
the need for three SCC regional offices, are already in the
works.
"We welcome her recommendations and are
currently identifying ways we can implement them -- as well
as others we've developed independently -- either
immediately or as soon as possible," Spencer said. "The SCC
is prepared to take whatever steps necessary to implement
additional internal and external controls to ensure that
every dollar is being spent appropriately."
Dunstan McNichol covers state government issues. He may
be reached at dmcnichol@starledger.com or (609) 989-0341.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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