Friday, January 21, 2000
Street deceit possibly criminal
Audit says some data fabricated
BY DAN KLEPAL and ROBERT ANGLEN
The Cincinnati Enquirer
Guesswork, management neglect and possible criminal conduct allowed city engineers to report as completed $15 million in street repairs that were never done, a city audit says.
In a scathing report, the city's internal auditor accuses a former engineer, Doug Perry, of misrepresenting — and in some cases fabricating — information relating to the street rehab program from 1991 until 1997.
That information has been given to city and county prosecutors. Mr. Perry, who could not be reached for comment Thursday night, resigned in 1998.
“The matter regarding whether Perry should be held criminally responsible for his conduct has been referred,” says the audit report, which was written by Greg Hanfbauer, manager of the city's Internal Audit Division.
In addition to Mr. Perry, the report says two current managers — City Engineer Prem Garg and Principal Engineer for Highways Brian Pickering — contributed to the problem by not reviewing work, lax planning and ignoring signs of trouble in the department.
In annual reportsbetween 1991 and 1997, the city's Engineering Division reported that a total of 818 lane miles had been completed at a cost of about $65 million.
The internal audit found that only 460 lane miles had actually been completed, costing $50.5 million.
“Some of the claimed production was simply fabricated,” the report says.
Mr. Garg doesn't buy it.
“I disagree with everything,” Mr. Garg said Thursday night.
In a written response to the audit findings, Mr. Garg said that he wasn't aware that Mr. Perry failed to report accurate lane-mile figures to his supervisor.
“It is not the responsibility of the city engineer to verify the data provided,” he said.
In his written response to the audit, Mr. Pickering said he “honestly did not know” about the misreporting.
The audit found several problems with the city's engineering department, including:
• Bad data: Mr. Perry often counted in his street rehab program estimated work done by others in his section, then duplicated that information elsewhere in each infrastructure re port.
In addition, the effects of numerous change orders on each contract were not taken into account and staff costs for design, inspection and construction management were omitted from the per-lane-mile cost computations.
This left Mr. Garg and Mr. Pickering without any objective cost data to use for budgeting, project planning or the preparation of estimates to evaluate bids against.
“Every report to the city manager, his staff or City Council regarding the rehab program during this period was flawed in some way,” the report says.
• Accounting information shelved: Management never reviewed invoices or payment vouchers that contractors must submit to the city before they get paid.
“These reports were the most reliable source of cost and performance information, yet they were simply filed without review or analysis,” the report says.
• Red flags ignored: A street rehab service review, initiated by Mr. Garg in 1995, pointed out corrective action that needed to take place to guard against misrepresentations.
The report, which cost an estimated $130,000 in staff time, was never approved by Mr. Garg and its conclusions were largely disregarded.
City Manager John Shirey called for the audit in October, but said he did not realize the extent of the problem until the first audit was completed in December.
When city engineers delivered their annual report, Mr. Shirey said he was struck by the small number of street repairs reported as complete. After seven years of completing more than 100 miles annually, engineers in their latest update said only 36 miles were done in 1998 and costs had soared.
Mr. Hanfbauer said he did not believe the $15 million went into anyone's pocket.
Last week, Transportation Director John Deatrick said the money was diverted from basic road work to bigger, high-profile projects because of political pressure.
He identified 25 projects funded with street-repair money that should not have been, saying the money was transferred because of pressure from City Council and the community to get particular streets done.
Once public works crews were told to get a project done, it didn't seem to be much of a stretch to take money from the annual street rehabilitation program and dump it into the street improvement fund, he said.
Rehab work involves basic street maintenance while improvement projects are extensive repairs and could include street widening.
Councilman Paul Booth said he was upset that he had to wait until Thursday night to get the audit report, which was dated Jan. 4. He said Mr. Shirey intentionally waited until the end of Thursday's council meeting to release the report.
Mr. Booth, who chairs the council's Neighborhood and Public Works Committee, said the report should have been made public sooner.
“Our credibility is on the line,” he said. “Citizens need full information.”
Mr. Booth said that, during next week's committee meeting, he is going to call for a “full airing” of the report.
Crediting Mr. Shirey for discovering the misrepresentation, he said it points to a problem in the city administration.
“The city manager is where the buck stops,” Mr. Booth said. “This points out the fact that the council has to start taking a good hard look at the information from department heads.”
Councilman Charlie Winburn said Thursday Mr. Shirey “scapegoated” the three city employees and should take responsibility for it himself.
“I think the entire engineering department should be held accountable, along with Mr. Shirey and his budget staff,” Mr. Winburn said.
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