LAUSD audit finds improper construction contracts

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Adolfo Guzman-Lopez/KPCC

Los Angeles City Controller Wendy Greuel, center, announces that an audit of the Los Angeles Unified School District's construction hiring practices revealed conflict of interest hiring. With her are LAUSD School Board President Monica Garcia and general counsel David Holmquist.

An outside audit of construction division hiring practices in the Los Angeles Unified School District has found conflict of interest hiring in the school district’s multi-billion dollar school construction projects.

The L.A. City Controller audit released today found 80 hirings carried out without a required panel. And four cases where a member of a hiring panel stood to benefit financially from the person hired.

“What we found in the district is from 2002–2006 primarily, the district’s oversight and polices relative to construction management professionals and a potential conflict of interest were very lax,” said L.A. Controller Wendy Greuel.

The audit also found the school district’s tightened controls since 2006. And that, says L.A. Unified general counsel David Holmquist, ensures taxpayer construction bonds are well spent.

“It validates a lot of our processes and improvement that we’ve put in, the controls we’ve put in place as a result of Teamsters and others bringing us concerns that have raised the issue up so that we can address them,” Holmquist said.

For years the Teamsters union accused the school district’s outside construction professionals of bypassing qualified in-house construction administrators.

The audit was prompted by a nine-count felony indictment earlier this year of a top L.A. Unified construction official Bassam Raslan. An L.A. County Grand Jury accused him of hiring people who worked for a company he co-owned, in violation of conflict of interest laws.

Greuel added that when the LAUSD decided to outsource construction and project management services, it created hiring panels consisting of district employees and contractors to make hiring recommendations.

The auditors recommended reviewing the 225 contracts where a hiring panelist worked in the same company as the contractor eventually selected for a project.

They also said the LAUSD should "consider investigating" the four potential conflict-of-interest cases in which the hiring panelist or regional director had a financial interest in the company which employed the contractor hired for a project.

KPCC wire services contributed to this report.

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