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September 13, 2022

CT officials extend timeline for school construction audit

MARK PAZNIOKAS / CT MIRROR Gov. Ned Lamont and Michelle Gilman, the commissioner of administrative services.

Following the disclosure of a federal investigation into Connecticut’s school construction program this spring, state officials vowed to restore trust in the system by reviewing four years’ worth of state-funded building projects.

Yet despite repeated promises from members of Gov. Ned Lamont’s administration to promptly deliver those audit results, nothing has been shared with state lawmakers or the public.

And state officials now say the team of independent auditors that was hired in March won’t be finished with its work until June 2023 — delaying any insight into the multibillion-dollar program that local districts rely on to finance school construction and renovation.

Kevin Kelly, the Republican minority leader in the Senate, said he was deeply frustrated at the lack of communication from state officials, after they committed to transparency.

“We don’t even get a status report,” he said. “They just clam up on us.”

Federal investigators first subpoenaed the state for records related to the school construction program in October 2021, and they focused their requests on several contractors and Konstantinos Diamantis, who led the school building program for more than six years prior to his exit from state government last fall.

The investigators followed up that initial request this spring by demanding records from at least four municipalities that undertook school construction projects in recent years.

Nobody has been charged to this point as part of the federal investigation. But when news of the criminal probe broke in February, several school superintendents and local elected officials came forward to announce that they felt pressured to choose specific construction contractors for their school building projects.

Those allegations and the flurry of subpoenas quickly set off a political firestorm in the state Capitol this spring, with Republicans calling for public hearings and Lamont, a Democrat, promising to get to the bottom of any potential wrongdoing.

In response, the Lamont administration announced plans to open a fast-paced audit to scrutinize the earlier work of Diamantis, who exited state government not long after the state received the initial subpoena from the federal grand jury.

Michelle Gilman, the newly appointed commissioner of the state Department of Administrative Services, told lawmakers during two separate hearings in March that her agency would present audit findings to the legislature by late spring, before the end of the legislative session.

“The vendor should be announced this week. That’s our expectation, and we will certainly share that information as it comes to fruition,” Gilman told lawmakers during a hearing on March 7. “We expect that work to start very quickly, and the initial reports should be complete by the end of April.”

The results of the audit, Gilman told lawmakers, were essential to fixing any “improprieties” in the system and restoring confidence in the school building program.

But six months after Gilman made those public pronouncements, Republican lawmakers say they are still waiting on DAS to provide them with an update.

Kelly said he has not received anything from DAS since the middle of March, when Gilman sent him a letter reiterating her commitment to briefing the legislature on the audit’s progress.

“The commissioner promised the end of April, both verbally before the committee and in writing to me,” Kelly said. “She promised the end of April, and here we are in September with nothing.”

Kelly said he assumed state officials would be more forthcoming with the audit results, considering how important the school construction program is to students, teachers and school districts in the state.

Officials at the Department of Administrative Services paid an independent auditing firm more than $250,000 to review nearly 100 school building projects and to scrutinize 19 related contracts in which the state paid for demolition work and hazardous material cleanup.

Documents obtained by the Connecticut Mirror show the agency hired Marcum LLP, an auditing firm with offices in New Haven, on March 8 to analyze those programs — both of which were overseen by Diamantis and were the focus of the federal grand jury subpoenas.

The contract that Marcum signed with the state called on the firm to update state officials every four to five weeks on the audit’s progress, and it required the auditors to submit two written reports to the state by the end of June, detailing their findings and recommendations.

But those reports have yet to be released or presented to lawmakers.

Lora Rae Anderson, a spokeswoman for DAS, said the agency is committed to sharing the audit findings eventually. But she said the agency will not do so until Marcum can complete a second phase of the audit, which DAS requested in early July.

“DAS has been in consistent communication with Marcum regarding the status of the review,” Anderson said. “We will continue to provide updates to legislators and others upon request. Once the review is complete, report(s) will be shared publicly with lawmakers and others.”

State records show DAS officials agreed on July 1 to lengthen the contract with Marcum, budgeting an additional $100,000 and giving the auditing firm potentially another year to complete additional work.

The revised contract that the state signed requires the firm to dig even deeper into a number of state-funded projects by next June. The expanded scope of work includes a review of 16 school construction projects that the auditors could not initially find files for, along with a random sampling of roughly 321 construction sites where the state paid for hazardous materials cleanup.

The results of that work are likely to be key to any legislative fixes that might be necessary for the school construction program. But DAS said it is not waiting until next year to start making administrative changes.

The leaders at DAS, Anderson said, are already using feedback from Marcum to adjust how the state is managing the dozens of school construction projects it undertakes every year.

“As a result of the on-going audit activities, our team has already made organizational improvements, and we look forward to sharing and discussing those steps with stakeholders upon the project’s completion.”

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