Our
Town:
Compton Woman Trains Entrepreneurs
At Last Minute, Shelter Denied Federal Funding for Code Violations
El Camino College Compton Center Premieres ‘First Year Experience’ Program
Night Out Draws Largest Crowd in Years
Gang-Peace Activist Darren ‘Bo’ Taylor Dies
Deputies Involved in Two Shootings Blocks Apart
Fewer Nonsmokers Breathe Cigarette Fumes, CDC Says
Jasmyne
A. Cannick:
Buffoonery: Get Some At a Theater Near You
Legal
Audit at CUSD Creates Controversy
Some school
board members label report ‘glaring’; others cite insufficiencies
in auditing methods
By
Allison Jean Eaton
Bulletin
Staff Writer
COMPTON – A
recent audit of contracted legal services at Compton Unified has
raised questions as to how much attorneys are charging, as well as
criticism of how the auditing firm conducted the study.
The school board held a special public meeting Tuesday, Aug. 5 to
cover the findings with a representative of Los Angeles-based law firm
of Fagen, Friedman & Fulfrost, which was paid $9,600 for the audit.
Peter Fagen was unable to attend the meeting due to a scheduling
conflict, but was on speakerphone to answer board members’ questions
and provide clarification on a number of issues.
The audit covered three law firms: Williams, Yasinski & Jones; Littler
Mendelson; and Orbach, Huff & Suarez. Each report was conducted using
a sampling of bills from the firm, which were then analyzed on a line-item
basis.
Board member Joel Estrada took issue with how the audit was conducted,
stating that the firm ignored generally accepted government auditing standards,
or GAGAS.
“As a lowly law student, I understand what most auditors use when
auditing respective law firms, and I’m a little puzzled as to why
your firm decided not to use the standard of GAGAS,” Estrada said. “I’m
concerned that GAGAS was completely pushed to the side.”
Fagen said that the money and time allotted for his firm to conduct
the audits – 40 hours – was not sufficient to use the standards.
Given the volume of their bills, there is “no way in the world” it
could have been done, he said.
According to GAGAS, when inconsistencies are detected during an audit,
the auditor should contact the firm in question to determine why the inconsistencies
occurred in case a reasonable explanation might be provided.
Board President Fred Easter echoed Estrada’s concerns.
“Why did you not do some kind of follow-up to get answers to the
issues that were cited (in the audit)?” he asked Fagen.
“I had to make choices as to where I was going to use my time,” Fagen
replied.
Board member Micah Ali said he’s not too concerned about the GAGAS
issue, though he views the audits as highly disturbing.
“We are absolutely being noosed and saddled,” he said. “These
legal costs are out of control.”
Asked if his firm might have been biased in the audit because it
is seeking to take over one of the contracts, Fagen said “nothing
could be further form the truth.”
He added that he did not recommend the district look for new representation,
but rather that it work with its current attorneys to implement potentially
cost-saving measures.
Board member Mae Thomas said she believes the district should have
an in-house attorney.
Board member Satra Zurita disagreed, saying she believes it’s in
the district’s best interest to renegotiate with its current law
firms or go out to bid.
The Bulletin obtained a copy of the audit, the findings of which
are summarized below.
Williams, Yasinski & Jones
Williams, Yasinski & Jones handles grievance matters, collective bargaining,
personnel matters and general litigation. Its invoices cover a time period
from August 2006 to January of this year. The audit was conducted using
five invoices totaling $23,952.
Based on experience of a senior partner who provides nearly all of
the firm’s services for the district, his rates of $295 and $325
per hour are consistent with the median rate charged by attorneys with
a similar amount of legal experience, according to the audit.
However, the audit did find that the utilization of a senior partner
at “the total exclusion of lower-rate associate attorneys results
in excessive fees billed.”
“Mr. Jones billed approximately 185 hours to perform legal services
that would have been appropriate for associate attorneys at lower
rates,” the
audit reads.
Littler Mendelson
Littler Mendelson handles labor relations, management training, general
education matters and special education litigation including OAH appeals.
Its invoices cover a time period from July 2006 to December 2007. The audit
was conducted using three invoices totaling $251,169.
Auditors found that the minimum billing increment used by the firm,
as per its retainer agreement, is .25 hours (15 minutes).
According to the audit, “utilization of quarter-hour increments as
a minimum billing entry rather than the more reasonable increment of .10
(6 minutes) results in increased charges to a client. Four one-minute phone
calls become one billable hour in a firm that that bills in quarter hours.”
The audit also took issue with Littler Mendelson’s practice of block-billing,
or the lumping of multiple entries performed on a given day into a single
entry, recommending that the district request the firm discontinue the
practice and separate each billed activity.
According to the audit, an analysis of the rates charged by nine
of the firm’s attorneys revealed that “certain individual attorney
rates appeared to be inconsistent and excessive based on State Bar passage
date and level of experience” as per a 2007 survey conducted by Altman,
Weil Inc.
Relative to the use of senior partners, the firm was found to utilize
partners when associate attorneys at lower rates could have been used.
Vague billing entries, examples of multiple firm personnel at the same
function and the use of attorneys for work that is better suited for paralegals
were also cited.
The firm’s Barrett K. Green, who serves as the district’s general
counsel, said he felt the audit was not very negative overall.
Rates for attorneys might vary due to how long they have been with
his firm rather than how many years experience they have, he explained.
And others have particular specialties, which cost more. Although rates
might be higher, because his firm is efficient, the overall cost is less,
Green said.
At the Aug. 5 meeting, he compared it to hiring a heart surgeon:
If you’re going to have heart surgery, you’re not going to
look for the cheapest surgeon around; you’re going to look for someone
with expertise who will likely charge more, he said.
“We appreciate the comments of the auditors and are happy to work
with the district” to implement measures that will potentially lower
costs, said Green, who described the district as “valued clients.”
Orbach, Huff & Suarez
Orbach, Huff & Suarez handle construction and real estate contracts;
construction projects and disputed agreements; litigation matters; facilities
services; and the district’s embattled modernization projects. Its
invoices cover a time period from November 2003 to September 2007, and
total $495,870.
Billing increments used by the firm vary, ranging from .01, .25 and
.17 in the invoices audited. According to the audit, the firm is to bill
for whole hours and .10 of an hour as per its contract with the district.
The firm was also found to block-bill and send multiple attorneys
to attend the same hearings and functions.
A number of possible billing errors were found with the firm, as
well as billing for overhead and administrative activities, vague billing
and the use of higher-paid employees to complete work that could be done
by lower-paid employees, according to the audit
Firm partner David Huff has been representing the district since
the late 1990s. Of the cited billing errors, he said they were merely human
mistakes that his firm has already corrected with the district.
When Fagen’s audit discovered an instance of double billing, Huff
took it upon himself to hire his own auditor to go over all invoices from
the four-year audit period. That audit found a total of 13 occurrences
of erroneous billing out of 8,150 billing entries and represented just
34 hours out of 19,800 hours billed. That’s an error rate of .0016,
he said.
“It did happen, but it was a mistake,” Huff said. “It
was an extraordinarily nominal number of errors. And we were proactive
in bringing
that to the district’s attention and crediting them the money.”
He explained that costs might seem high because of the large volume
of legal issues that have arisen from the district’s embattled facilities
modernization program, which is facing a more than $25-million deficit
and has resulted in multiple lawsuits that have tied the district up in
litigation.
Between 1997 and 2007, the firm handled a mere 10 cases relating
to 10 projects. But since January 2007, when facilities modernization issues
began to spring forth like weeds, the firm found itself faced with10 cases
spanning 50 projects and totaling $36 million in claims.
Today, the firm has settled seven of the suits and received judgment
in favor of another, resulting in claims against the district now totaling
only $11 million.
“That constitutes an entirely positive step,” Huff said.
He added that he was pleased with the audit’s overall findings and
is open to negotiations with the district.
Following the Aug. 5 meeting, the board instructed district administration
to research a number of items for board members, who plan to take measures
to bring the district’s skyrocketing legal costs down as soon as
possible.
The requests include: Compile a list of all attorneys working for
Compton Unified and their total bills/fees to date; research cost containment
measures by other districts; research and implement tactics suggested by
the firms the district contracts with rather than those highlighted in
the audit; and research the viability of using an internal controller for
legal matters.
“The superintendent is currently researching and gathering information
to respond to the board’s request regarding the attorneys’ audits,” district
spokeswoman Christine Sanchez said.
ADVERTISE | CLASSIFIEDS | ABOUT US | CONTACT US | SUBSCRIBE | HOME
This site and its contents ©2008 thecomptonbulletin.com