An auditor commissioned by the Lyons-Brookfield School District 103 board found that district officials did not always follow proper bidding procedures for two construction projects completed in 2012, resulting in more than $350,000 in cost overruns.

Gould & Pakter Associates LLC delivered the audit to district officials back in August. The Landmark obtained a copy of the audit via a Freedom of Information request earlier this month.

The audit, completed over a period of a year, between May 2013 and April 2014, determined that the expansion and renovation of George Washington Middle School ran approximately $357,000 over budget. Of that amount, according to the auditor, $247,000 of the overrun didn’t follow the public bidding process. 

And details of that $247,000 in expenditures are unavailable because vendors combined costs with other items or because supporting documents couldn’t be found. Further, no supporting information or documents could be found to verify about $68,000 in 25 payments to eight vendors.

“The scopes of work for vendors hired by the district (other than the district’s architect, Nicholas and [Great Lakes West]) should have been included in the Nicholas contract, GLW contract and/or competitively bid to other vendors and/or general contractors,” wrote auditor Michael D. Pakter.

Sharon Anderson, president of the District 103 Board of Education, told the Landmark that the board as of July 1 directed all purchase orders to go through the district’s director of business, Kevin Slattery.

“Mr. Slattery has overall responsibility for implementing the board’s policy … on purchases and contracts and accompanying written administrative procedures for purchasing,” Anderson stated in an email last week, “under the supervision of the superintendent.”

While the $7.1 million middle school project largely followed the correct procedures with respect to bidding and approving change orders, the auditor found that a no-bid roof repair project at Edison School in Stickney did not follow proper procedures in any way.

The Edison project was not put out for bids, because initial estimates suggested the project would cost just $35,000, which is less than the $50,000 threshold for seeking competitive bids, according to the audit.

However, the board’s own policy, which was last revised in 2011 and is published on its website, states that the threshold for competitive bidding is $25,000, so the Edison School roof project should have been competitively bid from the start.

As work on the roof progressed, the project morphed into a much more complex affair and the final bill to the district was 360 percent over budget at $161,000, which was paid to two companies linked to a favored district vendor.

In his report, Pakter, stated that the district should have hired an architect to define a scope of work and estimate of costs for the Edison project to see if it required competitive bidding.

Pakter also noted that the district did not have written contracts with either of the firms — Lembke & Sons True Value Hardware and A1 Building Maintenance and Plumbing — hired to do the work. 

A1 Building Maintenance and Plumbing is owned by Alan Lembke, the owner of the hardware store. According to the Chicago Sun-Times, District 103 has paid out more than $800,000 to Lembke & Sons True Value since 2007. 

The district also didn’t obtain any documents to prove the work was under warranty or ensure that the two companies followed insurance requirements or paid their employees prevailing wages.

Asked if anyone was disciplined for the failure to follow proper protocols for the GWMS and Edison projects, Anderson declined to answer, saying “the board will not comment publicly on personnel matters involving current or former employees of the district.”

The board voted 5 to 1 in March not to renew the contract of former business manager James Schiffer. However, that decision does not appear to have been related to the way the construction projects were handled.

Asked if the school district has continued to do business with Lembke True Value Hardware, Anderson said the district, to her knowledge, had not used the company recently and had not received any invoices from them.

Asked if there were controls in place to make sure the district was seeking price quotes from more than one company for work under the $25,000 threshold for bidding, Anderson referred the Landmark to the board’s purchasing policy, which was adopted in 1998 and revised three times between 2008 and 2011.

The policy states that purchases and contracts should be made “at the lowest cost, with consideration for service, reliability, and delivery promptness, and in compliance with state law” and that “no purchase or contract shall be made or entered into as a result of favoritism, extravagance, fraud, or corruption.”

Between the services of the auditing firm and the time the school district’s attorney, Heidi Katz, spent assisting auditors, District 103 spent almost $65,500 for the audit, according to billing statements obtained by the Landmark.

The school board in 2013 set a $60,000 limit to produce the audit.