By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Despite suspicions of questionable dealings first raised by ex-controller George Greanias before he left office in 1995, GHWP and Montgomery Watson had managed to keep their noses relatively clean as construction progressed. But a series of ten audits produced in late January by the accounting firm Mir*Fox & Rodriguez has raised concerns about the wastewater operation, especially the inspection and testing components.
Perhaps the most alarming finding reported by Mir*Fox was that tests performed on work done by contractors often failed to measure up to minimum standards. One job, a sanitary sewer rehabilitation constructed by Kinsel Industries, included failures on 100 of 518 testing reports. Yet apparently nothing was done to correct the problems.
Mir*Fox also discovered that in at least two cases, money was shifted from one testing contract to another, circumventing city rules. Hercules Engineering and Testing Services won a $5,000 contract to do the testing work on a relief sewer project built by Reliance Construction. But Bandy Associates actually did the work for $7,659, paid for out of a contract Bandy had for a completely different project. Hercules got its $5,000 -- for work on an unrelated project. The shifts made it difficult to tell who was getting paid for what, inspiring City Controller Sylvia Garcia to liken the paperwork trail to a "spaghetti bowl."
In addition, the accounting firm discovered numerous missing testing reports as well as conflicting documents submitted by inspectors, the testing firms and the construction companies. Mir*Fox found that inferior equipment or materials were substituted for better-quality items five times, with no explanation as to why. And one of the audits questioned the adequacy and training of the inspections staff, noting that in one case, a single inspector had to cover four or five projects simultaneously, even though the preferred ratio is 1.5 inspectors for every two projects.
The results wouldn't mean too much if they were the product of an exhaustive investigation of GHWP's hundreds of projects. But Mir*Fox randomly chose just a handful of contracts to study, and almost every one of them had some significant flaw. This prompted Controller Sylvia Garcia to issue a press release that questioned GHWP's integrity. "The audits have raised serious concerns about the quality of construction work and the quality of specific engineering testing services," the release read. "The lack of adequate record keeping raises serious concerns about contract compliance and about the safety of various Public Works wastewater improvement projects."
In a letter to Mayor Lee Brown and City Council members, Public Works Department deputy director Buddy Barnes objected to Garcia's interpretation of the audits. "Neither the audits nor internal Public Works and Engineering reviews have indicated safety problems or waste of money," Barnes wrote.
The failed tests don't pose a safety issue, Barnes wrote, because they were all evaluated by a professional engineer and deemed satisfactory. To prevent problems in the future, oversight of the testing function is being revamped. As for the other findings, Barnes added, the department has asked for additional audits and is conducting an investigation of employees who had been involved with testing contracts. In essence: We're working on it.
Barnes, who was not available for comment, left out a few details in his letter. If the failed tests were evaluated by a professional engineer, for example, why does no documentation of those alleged reviews exist? Barnes also stated that since Mir*Fox released its draft audit reports in January, "we have found additional copies of reports which were not available to the auditors." If so, why were those reports not in the files where they were supposed to be? And why does the controller's office still not have any of them? "We have never seen any additional documentation," says Sharon Adams, director of external affairs in the controller's office.
Barnes says he initiated a review of testing contracts after receiving the draft audits in January. This may seem like the instant response demanded by the sobering findings. But Barnes had heard all this before -- twice, in fact. Last June, former controller Lloyd Kelley produced a pair of audits, also done by Mir*Fox, that raised many of the same concerns, including compromised safety and wasted money. Three of the contracts under review, for instance, showed a total of 35 failed tests that had apparently been approved anyway by GHWP inspectors and managers. "GHWP has no system of control to detect the inspector's error or omission," the audit report read.
And a Houston Press investigation of other public works divisions last October and November looks like a blueprint of the current audits -- failed tests, missing records, cash shifted from one contract to another, too few inspectors. At the time, the division directors acknowledged a few kinks in the process, but said the problems would be resolved once everyone in Public Works got their record keeping and other systems up to the level of the model division -- the Greater Houston Wastewater Program.