Saturday, April 20, 2024

Audit finds Louisiana school district overbilled by $3M by contractor

Grant Parish School District says it has recovered the misspent funds

by BIZ Magazine
LOuisiana-money

(The Center Square) — A contractor paid $4 million by the Grant Parish School Board for mold remediation might’ve overbilled by more than $3 million, according to an investigative report.

Louisiana Legislative Auditor Mike Waguespack issued the report last week in response to complaints received from the Grant Parish Sheriff’s Office regarding emergency remediation and construction services in the wake of Hurricane Laura and subsequent storms.

“The Grant Parish School Board paid Benchmark Professionals LLC $4,008,782 to perform mold remediation services at GPSB facilities from September 29, 2020 to March 25, 2021, a roughly six-month period,” auditors wrote. “Records show neither Benchmark not its subcontractors were licensed to perform mold remediation services in Louisiana.

“Records further show Benchmark paid its subcontractors $720,231 (17.9% of the $4,008,782 amount) to perform what appears to be the entirety of the work; our review of records did not reveal any mold remediation work being performed by Benchmark itself.”

District records show Edward Sieja, project manager for the district’s construction manager Cimarron Underground Services, LLC, recommended GPSB use Benchmark for mold remediation. Sieja simultaneously contracted with Benchmark to serve as its sales representative, securing a commission for the work, according to the report.

“Bank records show Benchmark member Mr. Justin Guzman directed $1,865,056 of the contract payments to bank accounts he controlled, paid $1,353,300 (33.7%) in sales commissions to Mr. Sieja, and paid Cimarron $166,688 (4.1%) for amounts Benchmark owed Cimarron on unrelated projects,” auditors wrote. “Mr. Guzman, Mr. Sieja, and others may have overbilled GPSB and split the proceeds, in violation of state and federal law, as well as GPSB’s contracts with Benchmark.”

The report contends Superintendent Paxton Teddlie allowed Sieja to direct permanent repairs up to nearly $3.3 million for emergency remediation and temporary rentals on a time and materials basis without competitive bidding, written contracts, and against the advice of the district’s attorney. The result was Cimarron “may have billed GPSB as much as $2,311,576 more than the highest insurance cost estimates prepared for GPSB and/or Cimarron proposals for permanent repairs,” according to the report.

Auditors also revealed that Cimarron appears to have billed GPSB $435,139 for labor, materials, and equipment not provided or billed in greater amounts or durations than actually provided between Sept. 17, 2020 and Sept. 20, 2021.

Other findings allege Sieja and Guzman may have worked together to provide false quotes for a roofing project to steer business to Benchmark, which paid Sieja a $14,025 commission for the job. Insurance consultant Joel Moore also may have performed work as a public adjuster for GPSB without a license, and solicited additional compensations from a GPSB contractor and potential contractors.

Still more allegations center on Sieja contracting with Ballard CLC, Inc. for designs to replace roofs at seven schools that the district’s new construction manager, Scott Gaspard, determined were “not satisfactory” and “very incomplete.” The investigative report found Ballard appears to have overbilled GPSB $84,772, and the company’s officers, Bryan Butler and William Aldridge, appear to have had conflicting business interests with Sieja and Cimarron at the time.

Sieja denied any wrongdoing, and instead blamed Cimarron officials for billing and padding time and other costs.

“Ed Sieja had nothing to do with billing, padding time, taking building materials from the Grant Parish School Board for his personal use, or any other accusation made against him,” attorney Stacy Auzenne wrote in a letter to the LLA in late November. “Cimarron has attempted to bring false criminal charges of theft against Edward Sieja to cover their own wrongdoing, and even made an insurance claim for theft against him.”

The response also included numerous affidavits from Cimarron employees and Sieja, along with text messages, receipts and other documents explaining the issues involved. Others mentioned in the report also submitted responses disputing some of the allegations.

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