School bond audit questions $1.8 million

An audit of Baird Williams and Sledge Engineering for the work on the $21 million Taylor ISD bond revealed that there is $1.8 million in question.

Last year in July, the Taylor ISD board of trustees authorized an audit of Sledge Engineering and Baird Williams for the expenses of the $21 million bond voters approved in 2015. Monday night, the results revealed about $1.8 million in questioned charges to the district for the work on the project.

The audit was completed by Debbie Townsend, of RL Townsend and Associates, who gave the presentation.

"Cost of work included general conditions items," she said. "Without adjusting the terminology in the contract for cost of work, this creates an issue."

She said items included administrative, salaries, trailer and other general conditions items.

The general cost of work was $405,310 plus $389,684 for fees. The amount billed to the district for lump sum general conditions was $418,854.

"Basically, what the district got billed for was $400,000 of general conditions and then they got billed close to $400,000 for general requirements that were basically items that were in that [general conditions cost] list," Townsend explained. "Basically . . . you double paid."

She said the contract defines that what the district would pay is the contract sum, which is the cost of work and fees. It is not linked to the general conditions.

"There is not a way to reimburse for general conditions the way this contract is worded," she said.

Townsend said the proposal "deviates" from the contract and included premiums for select subcontractors to maintain payment and performance clause that are directly attributable to the contract as cost of the work in lieu of a cost to the construction manager.

"This is in direct opposition to what you have in your contract," she said. "The cost by doing this is $197,000."

She said the agreement was "crystal clear" that the district was not going to pay for bonds on subcontracts and the Guaranteed Maximum Price (GMP) was altered to say the district would pay for bonds and was billed.

Board member Marilyn Tennill asked who was responsible for the items that should have not been billed to the district.

"The contractor is going to say it was yours, but you had a project manager," Townsend said.

Tennill said the project manager should have been overseeing the construction and cost for the district.

"That's what you hired him to do," Townsend said.

Change orders taken to the board

The audit included two change orders approved by the board. One was approved for $91,382 for conduits. The subcontractor was paid $150,000.

The second was approved for $23,325 and the cost was $30,303.

The overage was $68,226, which was never approved by the board.

"Aren't we getting into criminal?" Tennill asked.

Board Vice President Shorty Mitchell agreed with Tennill and said the district paid someone to "look out for the district's best interest."

Subcontracted work

According to the audit report, Baird Williams provided a list of certain work that is not typically bid by other trades. The list included erosion and sediment controls, irrigation sleeves, structural steel erection, metal fabrication installation, rough carpentry, hollow metal door installation, wood door installation, door hardware installation and pre-engineered metal building erection. The total cost of the work was estimated at $995,222.

Townsend said some of the items are not usually bid, but instead done as a purchase order and installed by the contractor.

Baird Williams prepared a competitive bid and agreed to perform the work on a fixed, lump sum cost of $996,664.

Townsend said these are items the district should not have paid for.

Documents for the subcontracted work were requested but not received.

"Usually when contractors do a piece of work . . . they will prepare a subcontract just like everybody else, and then they will bill you through a payment application," Townsend said. "They didn't have a subcontract. They didn't have a payment application."

She said when asked Baird Williams was asked about the origin of the costs, she did not get an answer.

She said the irrigation sleeves was quoted at $20,027, and Townsend found a subcontract change order for $9,203. However, there was $10,824 that was unaccounted for.

Equipment and hoisting

The budget for equipment and hoisting was $58,700 and Taylor ISD was billed $200,059. Townsend said there were invoices for the cost which were for specific rental equipment for the project.

"It just seemed interesting that they would have the overrun on their people and the related party," she said.

Another questioned costs were warranty cost, which had no supporting documentation and was not included in the reimbursable expense, of $44,880.

Baird Williams issued a $33,000 credit for the clay material installed at the softball field that the district rejected.

"They never gave a credit change order to the subcontractor, so you actually paid for that," Townsend said. "You thought you were going to get a credit . . . you never got a credit."

With the fees and general conditions included, the cost was $34,323.

Board Secretary Thomas Rohlack asked if there were any errors in the favor of the district.

There was one back charge found which resulted in a credit to the district for $12,377 for a change order to replace equipment a subcontractor had damaged.

Board action

After a closed session that lasted over an hour, board members returned to open session, but took no action.

The Taylor Press will continue to follow this story with updates as they become available.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.