Report: San Mateo schools’ finances ‘grieviously flawed’ 

For the second time in as many months, a county civil grand jury released a report slamming the San Mateo Union High School District’s financial management, saying the process to select a contractor for a $298 million school construction bond was "grieviously flawed."

The report, released Thursday, was in response to district officials’ initial selection of Skanska USA as the construction management firm to implement 74 construction projects for seven schools as outlined in Measure M, passed by voters in November.

Skanska’s contract fee, initially set at $11 million, unexpectedly rose to $24 million in February. The district board severed its agreement with Skanska on April 19 after company representatives gave vague explanations for the fee increase.

Skanska, a Swedish company, was selected from among four bidding firms by a district committee in December.

Prior to Measure M’s passage, a Skanska employee — who worked under a different company with school district officials in implementing Measure D’s $137.5 million bond in 2000 — became "an unpaid advisor to the SMUHSD to assist the District in pre-bond planning for Measure M," the report said.

In July 2006, the district board awarded Skanska nearly $98,000 for "pre-bond work" in developing a six-year construction plan.

"The Grand Jury was told that this contract was awarded to Skanska, in part, because of the previous free assistance provided by Skanska to the SMUHSD," the report said.

Mark Haesloop, a school district attorney, said Thursday that "the selection process was slanted in Skanska’s favor" and that district officials began soliciting contractor firms on Nov. 14 of last year, with a deadline of two weeks for firms to respond. But because of Thanksgiving, "there were essentially only seven business days for anyone to review the project and decide whether to make a proposal," Haesloop said.

Board trustees Linda Lees Dwyer and Peter Hanley have joined Haesloop in drafting a list of recommendations for the May 10 board meeting, which will include hiring full-time in-house staff for monitoring construction projects.

"The district needs to review the policies and procedures for construction and look at the contracts it enters into," Dwyer said. The board may also decide to review all 74 construction projects under Measure M, with the intention of streamlining them.

In a statement, district Superintendent Sam Johnson, who is retiring next month, questioned the grand jury’s tactics, noting that some of the report refers to local newspaper articles.

"[The] Grand Jury investigation should focus on interviewing witnesses to obtain the facts," he said. "I am not familiar with any legal investigation resting its case on quotes from the media."

Last month, a grand jury report criticized the district for taking out $73 million in loans and several years of deficit spending, something that will affect the district budget for the next 37 years, according to the report.

Craig Childress, president of the district’s teachers association, said the Skanska episode reflected the district’s poor use of funds, calling it "controversial at best and corrupt at worst."

bfoley@examiner.com

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