In an 83-page report released Thursday, auditors found problems in the state’s oversight of the Office of School Construction Grants & Review. The flaws have already been the subject of internal investigations and a federal subpoena.
The Auditors of Public Accounts found that in the billions of dollars spent on school construction some of the projects exceeded the $365 per-square-foot guideline, other projects exceed the two-year deadline to start construction, and that many change orders exceeded the 5% cost allowance.
The audit also said the Department of Administrative Services improperly moved some of the responsibility of the Office of School Construction Grants and Review to the Office of Policy and Management.
“This reorganization resulted in a structural threat to audit independence,” the audit found.
They continued: “The unit must be free from interference in determining the scope of internal auditing, performing work, and communicating results.”
The Department of Administrative Services agreed with that finding and has already moved the unit back.
That decision to move the unit out of DAS was also highlighted by federal prosecutors when they subpoenaed Gov. Ned Lamont’s administration last fall for documents related to the school construction program and its former director Kosta Diamantis. The Lamont administration promised significant changes and moved oversight back to the Department of Administrative Services last October.
“This audit is showing we have complete incompetency and neglect in this program,” House Minority Leader Vincent Candelora said Thursday. “At some point the governor needs to come forward and take some responsibility and make sure he becomes a better steward of these tax dollars.”
The Lamont administration said it’s taken the necessary steps to begin to address the problems.
“The Lamont administration has taken multiple steps to strengthen the school construction program, and the recent audit findings affirm those decisions,” Max Reiss, a spokesman for Lamont, said. “In recent months there has been a change in leadership in addition to augmenting accountability efforts in the form of additional independent audits to review previous work. Gov. Lamont made these proactive decisions to the benefit of Connecticut residents who rely on the state for their school buildings to be completed in a transparent and comprehensive fashion, in accordance with state law.”
The audit found that 19 out of 23 projects it reviewed exceeded the cost-per-square-foot guideline and three were missing any physical documentation. That means they should not have received all the funding they did.
“Based on the department’s policies, the building construction costs that exceed the cost cap and a proportionate share of consultant costs would be ineligible for state reimbursement. However, the DAS commissioner has the authority to waive ineligible costs, allowing for the reimbursement of these costs,” the audit found.
During the time of the audit the ability to waive those costs fell to Diamantis.
“By not enforcing cost limits, school project costs may become excessive, and districts are reimbursed for otherwise ineligible costs,” the auditors wrote in their report.
DAS said it’s in the process of hiring a new director for the program “and that individual will be tasked with working to improve capacity to maintain the cost per square foot within guidelines, track costs in a more detailed and systematic level and assess whether such guideline should be adjusted.”
The audit also found that six projects – totaling $253 million – of the 14 projects it examined exceed the two year limit to start construction.