VLS Phase 1

I get the impression sometimes that people don’t believe me when I tell them I don’t really pay attention to the politics going on. But as an example there was, unbeknownst to me, a meeting of the “Subcommittee on Clay Investigation“. I did meet with my boss Mark Bonnett, the Associate Superintendent Sheri Gamba, and a representative from HR, about these issues. Little did I realize where it was at.

Anyway, I got this email from Ben Steinberg:

Hi All,

Last night, the Dennis Clay Investigation Subcommittee met in order for the forensic auditors to present their Phase 1 draft risk assessment of the WCCUSD bond program. The preliminary risk assessment showed that there a wide array of potential, high- and medium level risks to the bond program involving: conflicts of interest, compliance with legal requirements and board policies, budgeting practices, vendor contract administration, billings and performance of outside construction manager, change order approval and accounting practices, project accounting systems, and financial reporting (see the attachment Draft_Phase 1 for more specific information). The lack of internal controls and/or failure to adhere to the internal controls in the above listed risk areas opens the possibility for substantial problems to have occurred. As Mr. Cooper from the forensic audit firm Vicente, Lloyd, & Stutzman reported, there was “disdain from the top for internal controls.”

While Phase 1 serves to identify the areas with the greatest potential risk, Phase 2 of the forensic audit will drill down to determine if specific instances of fraud, waste, or abuse occurred in the WCCUSD’s $1.6 billion school construction program. The WCCUSD Board of Education must still vote to fund Phase 2, tentatively on January 20, 2016. As that vote draws closer, I will send out an “all hands on deck” request asking you to come to the meeting to speak about the importance of the Phase 2 of the forensic audit. From viewing Phase 1 results, I am confident that the forensic auditors are thorough, fair, and comprehensive. Your participation at this school board meeting will be critical.

I have also attached my notes from last night’s meeting that explain the draft risk assessment matrix in more detail (ClaySubcommittee2015Notes). The notes also reveal comments from subcommittee members and the public.

Joyce Tsai, the education reporter from the Contra Costa Times, also covered the subcommittee’s action last night. The article is very well worth the read: http://www.contracostatimes.com/breaking-news/ci_29186434/forensic-auditors-find-absence-strong-internal-controls-west

On separate matters, the SF Chronicle ran an important story about Lance Jackson from SGI and the Oakland Unified School District recently on November 21: http://www.sfchronicle.com/bayarea/article/Oakland-s-facilities-chief-oversees-work-by-his-6649232.php. The article ran on the first page of the Chronicle, just below the fold. A pattern appears to be emerging clearly from Sweetwater Union High School District, WCCUSD, and now OUSD.

At long last, we are getting to the bottom of all the rumors, concerns, and allegations swirling around the WCCUSD’s bond construction program. Thanks everyone for your dedication and commitment to see this through.

Warm regards,

Ben

Attachments:
VLS risk assessment v1 – draft
ClaySubcommittee_Notes2015

Why I Am Doing This

When I first started working for the West Contra Costa Unified School District (WCCUSD) the District had sold a little over $200 million in bonds, had built a middle school Lovonya DeJean, and was working on a number of elementaries, and was planning on working on a number of secondary schools. My boss at the time, Ted Hood, told me stories about project and fiscal mismanagement. And I watched him fight with our program management company, The Seville Group, Inc. (SGI).

Eleven years later we have spent $1.3 billion, have authorization to sell $380 million more in bonds, and though we have gotten better at project management, we haven’t gotten much better. We are going out to bid on the main construction contract of what looks like will be a $200+ project, Pinole Valley High School. And we are arguing about whether the budget is $180 million, or $181.9 million, and how to show the $181.9 million. And I hear that after seven years of paying architect fees, the drawings aren’t really that good, which will increase the change order rate.

Eleven years later the District is still dealing with SGI. This wouldn’t be quite so bad if SGI wasn’t found guilty in 2012 of bribing the Sweetwater Union High School District. And the School Board, despite staff recommendations, forced the District to sign a new no termination without cause contract with SGI. And I like the people at SGI. Hell, I even like their managers. But I don’t like what they do to their subcontractors, and I don’t like what they do to their customers.

And we’re running out of money. Unless the voters authorize another bond sale, and they didn’t in 2014, we have about $50 million cash on hand, about $380 million in bonds to sell, probably a few million in interest and other revenues, and whatever loose change we can get out of the sofa. After the $200+ million for Pinole Valley High School, and the $3-$8 million to run the program each year. There is not going to be a lot left over.

And all this would be worth it, the stuff everybody knows about, the stuff only a few know about, and the stuff nobody wants to know about, if it left the District’s in good shape. As our auditor’s said (I’m paraphrasing), if we required school districts to run their construction programs well, there wouldn’t be school construction programs. Which is a little cynical for my taste, but hey, we all live in the real world right?

We have some schools that rich wish their kids were going one as nice as, at least when their built. Unfortunately our maintenance budgets are quite as fat as our building budgets. We have a high school with sports fields costing more than we’ve spent on most of our elementaries. And we have projects that never seem to end because we keep doing one more thing on them.

Unfortunately the District’s schools aren’t going to be all right. WCCUSD is currently undergoing a master planning process, in which twenty-one schools are considered in need. Twenty-one is forty percent of our schools. We have spent $1.3 billion dollars, and we have almost half of our schools “in need”. At this rate we would need almost another billion dollars.

And that isn’t the worst part. The worst is that the current administration is treating this as a PR problem. We went through a master planning process in 2007. You used to be able to find it on the CBOC website. Now it looks like another one of those things flushed down the memory hole (it was included in my original document release).

We are spending over $400 thousand because somebody is going to have to tell parents, “Sorry, we don’t have money for your school”, “Sorry, we are going to have to close your school”, “Sorry, your school is going to be moved into portables indefinitely”, or worse, “Sorry, we don’t have any money to fix anything at your school”.

One of our CBOC committee members spoke of his vision for this District. He said that he wanted our District to be the one people lied about where they lived so that their children could attend here. From his lips to God’s ears.

WCCUSD Bond Program Supporters

No program lasts for fifteen years, and over a billion dollars without significant support. And this one certainly hasn’t either. My google-fu on this is not great (I wish Charley was still blogging, hint, hint), but here is a couple lists of supporters I’ve run across today.

The first is from the Ivy League Connection, one of Charles Ramsey’s, and now Madeleine Kronenberg’s favorite charities.

Ivy League Connection Sponsors
SGI
WLC Architects
IBEW/NECA Statewide LMCC
Beverly Prior Architects
Sally Swanson Architects
HY Architects
Deems, Lewis and McKinley Architects
Baker Vilar Architects
Powell and Partners
Quattrocchi Kwok Architects
Amanco, Inc.
KNN Finance
Piper Jaffray Inc.
EJ Delarossa Inc.
David Casnocha
The National Electrical Contractors Association, Contra Costa Chapter
The National Electrical Contractors Association, NorCal Chapter
Northern California Carpenters Regional Council
Electrical Contractors Trust, Alameda County
Garcia, Caledron and Ruiz, Attorneys at Law
Plumbers and Steamfitters Local 342
Davillier Sloan, Inc
Mary Hernandez

10 Minutes

 

Bill Fay

The man speaking is Bill Fay, the former Associated Superintendent of Operations at the West Contra Costa Unified School District (WCCUSD). Prior to this meeting in February 2014 he was considered by some of the Citizen’s Bond Oversight Committee (CBOC) as part of the problem with the bond construction program. He was involuntarily let go shortly after this was put on the web with a controversial severance package (see Charles Cowens original post).

The second speaker for the District is my good friend and former boss, Martin Coyne. Some of the CBOC committee members are (not comprehensive): Tom Waller, Ken Jett, Charles Cowens, and Ivette Rico (Committee Chair).

The most important ten minutes I’ve ever spent in a meeting. It explains fairly succinctly much of what has gone wrong with District’s building program. “Scope Driven” was a phrase frequently used by the former Board President to justify decisions. So understanding what it means is important.

The question of the District paying for Architect’s mistakes (“errors and omissions”) also comes up. The industry standard is that the architect pays. In this District to date, the District pays. Worse than that, we not only pay the contractor to make the fix, we pay the architect for the extra time to design the fix. It doesn’t feel good no matter how you look at it.

Dennis Clay Allegations

This post is to give an update on what has been going on, and to put down some of the background links.

In April I put out a bunch of documents about what had been going on in the West Contra Costa Unified School District (WCCUSD) bond construction program. It got traction for several reasons; the first is that I was asked to present it to a grand jury (civil, not criminal). The second is that on the last school board election two new board members were elected on the anti-current administration platform. The third was that there was a growing consensus on the Citizen’s Bond Oversight Committee (CBOC) that there had been long standing unaddressed problems.

It began with the District hiring new performance auditors. I knew that there had been no chance of anything damaging being included by the prior auditors, but the new ones had been significant in uncovering corruption by the WCCUSD’s program management firm down in San Diego. I thought, in error, that they would be willing to look at some of the discrepancies in our district. So I gave to them everything I had the time and ability to document about Fiscal 2014.

And they didn’t include a thing. They didn’t even find anything that they should have about the specific, narrowly focused, areas that they did look at. So I documented that. Then I added some comprehensive program to date reports and reconciliations. Then I emailed the Executive Summary and 2015 Updates narratives to the WCCUSD Board, and told them I had mailed a CD of the complete document set, and walked out the door to present the same to the Grand Jury.

A link to the original documents can be found on Charles Cowen’s website, Mystery Education Theater 3000 (thanks Charley). Either I am the only person who thinks that’s funny, or I’m getting older than I want to admit. Charley also uploaded the original email and two attachments I sent to the Board on Scribd. The two attachments are listed below, along with some other related documents,

Charley has also put up what I think is the most key ten minutes of audio on the subject from any District meeting that I have attended. It’s also what got Bill Fay, the Associate Superintendent of Operations, fired. Budget and Schedule Are the Hobgoblins of Small Minds.

You can also read about it in the Contra Costa Times, at the West Contra Cost Unified School District’s (WCCUSD) website, and at the WCCUSD Citizen Bond Oversight Committee’s website. And as it lists on the District’s page, there is a fraud reporting website (password: wccusd).

It’s funny reading or hearing “the Dennis Clay allegations”. I’m not sure people know or understand what I’ve alleged. There is widespread suspicion of pervasive corruption, but the documents I put together for the most part do not speak to that. It does speak of incompetence, laxity, and mismanagement. It also speaks of criminal behavior, but of the kind that gets people fired, not put in jail.

It was also, by its nature, about the past. The past is important because it is the basis of the present, which leads to the future, but unlike accountants most people live in the here and now, and are concerned with what comes next. The District would like to say (it has said) that the problems were all because of the former Board President, which has some substance to it. But no organization acts based on the direction of single man, and neither has WCCUSD.

The District (he, she, they) have also said that I am a disgruntled employee. I guess I am so disgruntled that I have pretty much, except for two interviews, left it alone for six plus months, and only gotten back into it because they (always the anonymous they, eh?) can’t answer the auditors questions without my help.

I’m sorry if I have given the impression that I am hard pressed upon. I’ve actually been having fun this year. I’ve gotten quite good at doing SQL reports using SSRS on the District’s accounting system. It’s been a nice change of pace to do something, important, fairly technical, and completely non-controversial.

But as they say in the movies, the best is yet to come.

We the People

If someone had told me twenty years ago that one of Václav Havel’s dissident writings would have a significant affect for me personally, I would have thought they were crazy. Unfortunately we live in crazy times.

THE MANAGER of a fruit-and-vegetable shop places in his window, among the onions and carrots, the slogan: “Workers of the world, unite!” Why does he do it? What is he trying to communicate to the world? Is he genuinely enthusiastic about the idea of unity among the workers of the world? Is his enthusiasm so great that he feels an irrepressible impulse to acquaint the public with his ideals? Has he really given more than a moment’s thought to how such a unification might occur and what it would mean?

I think it can safely be assumed that the overwhelming majority of shopkeepers never think about the slogans they put in their windows, nor do they use them to express their real opinions. That poster was delivered to our greengrocer from the enterprise headquarters along with the onions and carrots. He put them all into the window simply because it has been done that way for years, because everyone does it, and because that is the way it has to be. If he were to refuse, there could be trouble. He could be reproached for not having the proper decoration in his window; someone might even accuse him of disloyalty. He does it because these things must be done if one is to get along in life. It is one of the thousands of details that guarantee him a relatively tranquil life “in harmony with society,” as they say.

Obviously the greengrocer is indifferent to the semantic content of the slogan on exhibit; he does not put the slogan in his window from any personal desire to acquaint the public with the ideal it expresses. This, of course, does not mean that his action has no motive or significance at all, or that the slogan communicates nothing to anyone. The slogan is really a sign, and as such it contains a subliminal but very definite message. Verbally, it might be expressed this way: “I, the greengrocer XY, live here and I know what I must do. I behave in the manner expected of me. I can be depended upon and am beyond reproach. I am obedient and therefore I have the right to be left in peace.” This message, of course, has an addressee: it is directed above, to the greengrocer’s superior, and at the same time it is a shield that protects the greengrocer from potential informers. The slogan’s real meaning, therefore, is rooted firmly in the greengrocer’s existence. It reflects his vital interests. But what are those vital interests?

Let us take note: if the greengrocer had been instructed to display the slogan “I am afraid and therefore unquestioningly obedient,” he would not be nearly as indifferent to its semantics, even though the statement would reflect the truth. The greengrocer would be embarrassed and ashamed to put such an unequivocal statement of his own degradation in the shop window, and quite naturally so, for he is a human being and thus has a sense of his own dignity. To overcome this complication, his expression of loyalty must take the form of a sign which, at least on its textual surface, indicates a level of disinterested conviction. It must allow the greengrocer to say, “What’s wrong with the workers of the world uniting?” Thus the sign helps the greengrocer to conceal from himself the low foundations of his obedience, at the same time concealing the low foundations of power. It hides them behind the facade of something high. And that something is ideology. . .

The smaller a dictatorship and the less stratified by modernization the society under it, the more directly the will of the dictator can be exercised. In other words, the dictator can employ more or less naked discipline, avoiding the complex processes of relating to the world and of self-justification which ideology involves.

The wall came down because people spoke up, not just a few heroic dissidents, but ordinary people everywhere, even green grocers.

The founders began by committing treason, a capital offense. Today, we are afraid for our jobs and because of what people will think. As Marx said, “the first time as tragedy, the second time as farce.” We live in the tyranny of management ethics, political correctness, and the twitter mob.

I don’t speak of my tagline much, but I plan on dying free, if only in the Robert Heinlein sense.

I am free because I know that I alone am morally responsible for everything I do. I am free, no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I alone am morally responsible for everything I do.

Civics Class

2015 Grand Jury Report

I’ve been going through some stuff¹ at my work for a local school district that culminated in my going before the County’s Civil Grand Jury.

Every year, in each of California’s 58 counties, a group of ordinary citizens takes an oath to serve as grand jurors. Its function is to investigate the operations of the various officers, departments and agencies of local government. Each Civil Grand Jury determines which officers, departments and agencies it will investigate during its term of office.

I have to say that I was impressed by the seriousness, forthrightness, and good humor² that they brought to my time with them. Especially since serving on a Grand Jury has got to be a largely thankless task requiring almost a full time commitment.

Likewise I have been impressed by seriousness and sincerity that is present every time a public WCCUSD meeting begins with The Pledge of Allegiance. I look at the people and marvel at what they create³ out of thin air. I have never seen someone scoffing at the spectacle, and can’t remember seeing someone not participating.

I think the genius of America has been more in its small associations than its large, and it hardly gets smaller than a school district.

No sooner does a government attempt to go beyond its political sphere and to enter upon this new track than it exercises, even unintentionally, an insupportable tyranny; for a government can only dictate strict rules, the opinions which it favors are rigidly enforced, and it is never easy to discriminate between its advice and its commands. Worse still will be the case if the government really believes itself interested in preventing all circulation of ideas; it will then stand motionless and oppressed by the heaviness of voluntary torpor. Governments, therefore, should not be the only active powers; associations ought, in democratic nations, to stand in lieu of those powerful private individuals whom the equality of conditions has swept away.

As soon as several of the inhabitants of the United States have taken up an opinion or a feeling which they wish to promote in the world, they look out for mutual assistance; and as soon as they have found one another out, they combine. From that moment they are no longer isolated men, but a power seen from afar, whose actions serve for an example and whose language is listened to.
Alexis de Tocqueville

What I’m going through will probably get kicked up a level soon. I don’t doubt the final outcome. But it is only because good people, most of whom I wouldn’t recognize if they sat down next to me, have come together because they wanted change.

---

1 Stuff is obviously a euphemism for stuff I don’t want to get into, but you can get an idea from this, this, and this.

2 Never discount the power of a little amusement.

3 I’d use the word patriotism, but it is in bad odor now-a-days and would be misunderstood, probably intentionally.