Contractor reimburses $1 million to system

Posted Friday, March 10, 2006

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More than 18 months ago the Fulton County Board of Education began steps and actions to reduce capital costs, improve accountability, streamline construction processes, and ensure transparency in school system operations.

 

At its March 9, 2006, meeting the Board and Superintendent announced that they are pleased with the efforts to date. As part of the update, the Board released an audit of one project and announced that additional funds are being recouped as the system continues to improve its capital program practices.

 

“Our efforts have resulted in millions of dollars in savings for Fulton taxpayers,” said Board President Gail Dean. “We have greatly reduced our costs and moved forward with a quality capital construction program.”

 

The School Board and Superintendent have taken a series of decisive and progressive actions, including outsourcing the construction program, and working with contractors and asking them to review their own books. As a result, several companies voluntarily refunded and credited the school system millions of dollars. Substantial savings in the construction costs have been realized and, according to an October 2005 report from the system’s construction management firm, approximately $8 million has been saved by outsourcing and moving to a hard bid rather than Guaranteed Maximum Price (GMP) contracting practice.

 

On March 9, the Board announced that it is taking further steps to secure additional funds. The School Board is releasing one project audit that was prepared by Kessler International--Freemanville Road/Milton High School. The Board also authorized school system attorneys to take legal action, if necessary, to recoup funds that may be owed to the school system.

 

The Freemanville Road/Milton High School audit concludes that many of the costs were questionable, and many of the bidding arrangements needed to be scrutinized. The audit, however, is not fully complete due to the failure of a contractor to comply with documentation requests, even though they are contractually obligated to do so.

 

Said President Dean, “One of our contractors has not met his obligations under his contract, and he is certainly hampering the efforts of the Board-authorized audits. The contractor is disregarding his responsibility to accurately report to the public the use of taxpayer funds. The Board cannot, and will not stand for such blatant disregard of the public trust.”

 

With the previously stated goal of recouping all possible funds, the Board has authorized its attorneys to take any and all means necessary to obtain these records from the project’s general contractor—Gilbane—and fulfill the goal of recapturing all monies due the district.

 

“We expect our contractors to provide the information we need to complete our audits. We are very concerned this has not been done,” said Dean.

 

The Board also announces an agreement, in principal, with one contractor to return an additional $1 million from one of the other projects being audited. E. R. Mitchell has already returned over $700,000 to the school system. In recent negotiations the Fulton County School System has been able, through its attorneys, to secure an additional $1 million settlement from E. R. Mitchell, bringing the total to over $1.7 million in direct cash reimbursements.

 

“We are pleased with the additional funds from E. R. Mitchell,” Dean continued. “Our efforts have already saved the school system millions. The Board has been diligently working for some time to bring more accountability into the construction process and we are now realizing the benefits.”

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