Audit Urged of Schools’ Construction Program

Howard Miller, the chief operating officer for Los Angeles’ schools, has asked for an audit of the district’s massive bond-funded construction program to examine reports that management fees are soaking up more than 19% of all expenses.

Announcing the audit, Miller refused to allege corruption in the $2.4-billion program but said he does not believe the district is getting its money’s worth.

Miller said the investigation by top district auditor Don Mullinax would look into the efficiency of the management team and “whether billing has been appropriate.”

With controversy continuing around the Los Angeles Unified School District’s construction program, Miller also announced a new legal strategy for recovering up to $1 billion in state bond funds that the district has apparently lost by falling behind in filing applications.

He said the district would support a lawsuit by a group of civil rights attorneys who plan to go to court to demand that the state set aside bond funds for new Los Angeles schools even if the district is late in presenting applications.

The suit will argue that the state law that mandates equality of educational spending applies to facilities as well as expenditures inside the classroom, Miller said.

Civil rights attorney Constance L. Rice confirmed that her law firm and others are exploring such litigation.

“Right now, Los Angeles children are facing the prospect of not having the facilities that they need just to have a seat in a class,” Rice said. “That’s unacceptable. L.A.’s fair share of Proposition 1A money must be secured.”

Miller disclosed plans for the lawsuit and the audit as he fended off sharp criticism from the citizens committee that oversees spending of money from Proposition BB, the $2.4-billion school bond approved by Los Angeles voters in 1997.

Several members of the 11-member committee criticized him for his decision to call in the Army Corps of Engineers as project managers for his program to construct 150 primary centers and convert middle schools into high schools.

Committee Chairman Steve Soboroff argued that if Miller wasn’t happy with the performance of the current program manager, 3D/I-O’Brien Kreitzberg, he should work with them to improve their performance or dismiss the firm.

Miller countered that the corps would insert needed competition into the program.

In the contentious exchange, committee member David Abel accused Miller, a longtime friend, of becoming as autocratic as a czar.

Miller accused Soboroff, a candidate for mayor, of attacking him for political gain and Soboroff said Miller was being “demoralizing and irresponsible.”

Although Miller declined further comment on his dispute with 3D/I-O’Brien Kreitzberg, documents obtained by The Times show that an audit of the Proposition BB bond money found questionable billings in several spot checks.

The auditor, hired by the Proposition BB committee, found that in most cases it checked, billings were about 10% greater than the actual pay rates for the work performed.

Program manager 3D/I-O’Brien Kreitzberg was not able to provide accounting data to justify the overhead, auditors said.

“In the absence of accounting data, we are unable to evaluate the propriety of the overhead rate . . . and consequently, the propriety of costs billed thereunder,” the draft of the audit said.

Another document indicates that the program manager and 10 project managers, each of whom oversees work in a portion of the district, have been paid a total of $74 million, equaling 19.2% of the $386 million so far spent in the five-year program.