District’s Freelance Fees Cited in Audit

The inspector general of the Los Angeles Unified School District has questioned whether $2.5 million in freelance fees paid to four real estate consultants over two years was too high.

The four consultants, hired to identify, purchase and prepare land for a massive school construction program, were among the most highly paid people in the school system, according to the watchdog office’s audit. One of the four received fees exceeding Supt. Roy Romer’s annual $250,000 salary, the report found.

The audit did not allege any wrongdoing and said that short-term use of well-compensated consultants can be justified. But it criticized the long-term freelance payments and suggested that at some point, permanent staffers should have been assigned the work for half the pay. Whether the executives were worth the extra fees “is questionable,” the report said.

The audit also criticized the district’s facilities division for allowing the executives to submit vague expense descriptions and for failing to develop detailed criteria to judge their performance.

The investigation focused on consultants Ron Bagel, W. Roderick Hamilton, Edwin Van Ginkel and Enrique Rodriguez.

Rodriguez was hired at a $300 hourly rate, and in 2000, he received about $465,000. In all, Rodriguez and his consultancy firm, Rodriguez & Associates, received $1.1 million between February 2000 and December 2001.

During the same two years, Hamilton earned $478,450; Van Ginkel earned $526,050; and Bagel earned $430,800.

Chief Facilities Executive Jim McConnell acknowledged that the fees paid to the four were relatively high. But he insisted that the district got its money’s worth, because their work helped secure $900 million in state construction funds that many expected the district to forfeit because of disorganization. The four were given contracts when the district was scrambling to meet a June 2002 deadline for the state funds.

“Did we pay too much? Maybe,” McConnell said. “Did those contracts yield services vital to the district? Yes.”

McConnell said that, with recent reforms, such long-term consultancy contracts were no longer necessary. In response to the audit, the district will receive competitive bids on almost all short-term real estate consultant contracts, said McConnell. He added that a few of the most specialized contracts would be bid out for between $175 and $225 an hour, which he said is an industry standard.

Rodriguez stopped working for the district last summer. Bagel’s fees now amount to about $300,000 a year, but facilities spokeswoman Shannon Johnson said the district will offer him a staff position for half that rate when his contract ends in November. Hamilton’s contract will be put out to bid in July. And Van Ginkel’s $300 hourly rate was cut to $225 an hour in July, according to Johnson.