School-building
agency under repair
SCC makes changes to regain
public confidence in $8.6B program
Saturday, May 14, 2005 • BY DUNSTAN McNICHOL •
Star-Ledger Staff
Continuing its makeover, the agency in
charge of New Jersey's $8.6 billion school construction
program yesterday hired a financial expert as its first
chief financial officer and banned consultants from charging
pricey office equipment to school jobs.
"This is yet another major step in our
efforts to regain the public's confidence in our school
construction program -- one that is truly rebuilding New
Jersey's schools from the ground up," said Jack Spencer,
chief executive officer of the Schools Construction
Corp.
The decision to hire Peter E. Maricondo,
vice president and chief accounting officer of NUI Corp. in
Bedminster, for the newly created post of chief financial
officer came at a special meeting called by the panel's new
chairman, Al Koeppe.
Koeppe was appointed chairman on Tuesday
after Jack Kocsis stepped down. Kocsis faced criticism that
his role as chairman posed a conflict with his private job
as executive director and lobbyist for a major builders
advocacy group whose members are handling $1 billion in SCC
work.
At a special meeting of the corporation's
board yesterday, Koeppe retooled the board's structure and
installed himself and two other new board members on the
corporation's audit committee.
Promising a push for better oversight,
accountability and efficiency in the program, Koeppe also
announced plans to hire an outside consultant to do an
operational audit of the corporation.
"You're working day in and day out, and
you're doing a good job," Koeppe told the roomful of SCC
officers who attended the special board meeting. "The next
step is to get better and to hold people
accountable."
The SCC began its overhaul in response to
a state inspector general's report that concluded flawed
management controls left the agency vulnerable to "waste,
fraud and abuse."
The inspector general suspended new
contract awards until the agency implements a series of
changes she recommended. Koeppe said he hopes to have all
the changes made by August.
Acting Gov. Richard Codey ordered the
inspector general's review in the wake of a Star-Ledger
analysis that found the six schools built by the SCC since
2002 cost, on average, 45 percent more than 19 schools built
without SCC management at the same time.
The SCC announced yesterday it has set a
new policy that requires the construction firms that have
collected more than $230 million for overseeing SCC school
projects to pay for the office equipment and furniture they
use at their job sites.
A Star-Ledger report last month showed
that project management firms were requiring the
construction firms bidding on SCC jobs to provide $15,000
copiers, $7,200 nationwide cell phone contracts and other
top-of-the-line equipment and furnishings to the management
firms.
In a bulletin sent to the project
management firms this week, the SCC specified that
computers, cell phones, copiers and amenities, like coffee
service and microwaves, which project management firms had
been charging to the construction companies, must be
supplied by the management firms as part of their contract
with the state.
The SCC also says project management
firms must reimburse the corporation for office equipment
that was purchased with school construction
money.
In Maricondo, Koeppe said, the SCC will
get a tough controller with a long track record of managing
finances and fixing troubled accounting systems.
Maricondo has been with NUI since early
2003, and helped steer the firm through the settlement of
regulatory sanctions imposed over improper activities by the
corporation's energy trading unit.
In November, NUI agreed to refund
customers $28 million and pay a $2 million fine to settle
charges that the utility was improperly covering costs in
its energy trading unit with utility customer payments.
Maricondo is credited with having discovered the
irregularities.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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