Two-thirds of the money that the Department of Education paid for certain computer consultants ended up in the pockets of a middleman under an illegal scheme that cost taxpayers $1.5 million, investigators have determined.
Some school officials were aware of the practice and, in an astonishing move, even asked the consulting company to boost its rate, apparently to funnel more money to the favored middleman.
“Unaccustomed to requests from clients for higher bills,” the stunned contractor said in a request for written authorization – which never came, according to a Dec. 27 report from Special Schools Investigator Richard Condon to Chancellor Joel Klein.
Condon criticized three Department of Education officials for failing in their “oversight responsibilities.”‘
All three – Kevin Gill, Vincent Romano and Bruce Hoffman – had left in 2003 as a result of an earlier investigation into inflated billings in the $400 million school-lunch program.
A fourth school official cited by Condon retired last August. Condon recommended that a fifth, still employed, be fired.
Condon said the school system was ripped off because it allowed a per-diem consultant, Mohinder Lamba, wide latitude in hiring for the Department of Education’s contracted computer vendors, TSR Consulting Services and Data Industries, Ltd.
The services were provided to two DOE offices: pupil transportation and information technology.
But Condon said workers who were recruited off the Internet ended up on the payroll of Reba Software & Services, a company owned by Lamba.
The school system’s contract with TSR and Data Industries doesn’t allow subcontracting.
Before new administrators halted the practice, Condon found, Reba billed Data and TSR nearly $9 million for consultants assigned to the school system from October 2000 through July 2003.
Data and TSR, in turn, marked up these bills by 15 percent, Condon said.