First posted 3/2/2009 11:50 a.m.
Web Extra! Download the PeopleSoft investigation report
No one will lose their job as a result of the PeopleSoft investigation.
That was one of several points made at a press conference that Oak Park trustees Ray Johnson and Jon Hale called early Monday morning to release an investigators’ report on the hiring of and payments to a software consultant.
Over a 14-month period that ended in August, the village paid $279,875 to Jennifer Grochowski, a specialist on the confusing bookkeeping software that the village has had problems with since its installation in 2003.
“The good news is there is no evidence of fraud … there is no malicious intent of any kind. But mistakes were made,” Johnson told reporters from Wednesday Journal, Oak Leaves and The Chicago Tribune.
In their own three-page summary of the investigators’ seven-page report, Hale and Johnson wrote:
“While there is no evidence of Manager Barwin misusing his discretionary spending authority or any fraud or malfeasance, the manager’s lack of oversight in this matter raises obvious concerns.
“The board shares responsibility with the manager for stronger oversight, improved financial reporting, and action steps to reform procurement procedures.”
At issue have been payments to Grochowski beyond the $75,000 contract that the board approved in the summer of 2007, when she was brought in to help village staff use the software. Her work, and her billing, continued without board members ever voting upon an extension of her contract – as required by village ordinance.
There’s also been question of her hiring by the village’s chief financial officer Craig Lesner, who knew of the consultant because she and Lesner’s wife are in the same book club.
The investigators concluded that Grochowski was qualified to do the work she was hired to do. But they also concluded that Village Manager Tom Barwin and chief financial officer Craig Lesner did not follow proper procedures in hiring Grochowski and then erred in allowing her to continue to work after she had earned the $75,000 that her contract called for.
Johnson said there was plenty of blame to go around.
“There were obviously mistakes made in the manager’s office. There were mistakes made in the finance department. There were mistakes made in the legal department. And the village board didn’t act as quickly as it should,” Johnson said.
The investigation concluded that while Barwin did not abuse his discretionary authority to issue checks of less than $25,000 without board approval but also concluded that he did not exercise proper oversight over the contract.
“Tom notified the board on Oct. 25, 2007, that the contract was going to need to be extended and Craig Lesner reiterated that to the board in the public meeting that was held Dec. 10, 2007, and the dollars provided for that support was included in the budget that was adopted by the board in December 2007,” said Oak Park Village President David Pope.
Trustee Greg Marsey says he’s not convinced the money in the budget was specifically earmarked for Grochowski.
“I don’t think it’s quite accurate to say the money was budgeted,” Marsey said Monday night. “The money was there and the money was spent. Whether it was specifically for the PeopleSoft consultant, I’m not so sure.”
But an extension of the contract with JCG Consulting was never placed on a board agenda, an oversight that both Pope and Barwin attributed on Monday to the pace and demands of other details.
“It’s just for whatever reason – the crush of business at the time – it never happened,” Barwin said.
Grochowski submitted invoices regularly and was typically paid every two weeks. Barwin estimates that 75 to 100 checks are issued to vendors every two weeks. and he did not keep close tabs of Grochowski’s hours. Grochowski billed the village for 2,239 hours of work over a 14-month period. Johnson said that Grochowski was working at village hall on just about every workday and some Saturdays.
Barwin said that it was not until last August that he was aware that Grochowski had been paid more than three times the amount the village board had voted to pay her.
He says that as soon as he learned that she had exceeded her contract, he told her to wrap up her work.
“There was certainly never any effort to hide anything,” Barwin said.
The report found no evidence that Barwin or Lesner deliberately paid Grochowski in increments of under $25,000 to avoid going to the board for approval of her continued work.
The book club connection
The report concluded that despite Grochowski being in Lesner’s wife’s book club she was hired in good faith by Lesner and that other consultants were considered, although the bids were informal and not documented.
“There is no evidence that the association unduly influenced the selection. There is no evidence that a quid pro quo existed between the CFO and the consultant regarding this selection,” the report states.
The association was revealed to the village staff who participated in the screening and selection of Grochowski.
Johnson clarified that formal bids are a preference but not a requirement for professional services not widespread in the marketplace, but a letter must filed saying so. The report states that Lesner was not aware of village policy that required him to provide such written explanation.
The PeopleSoft price tags
At the center of the concern is how to get hand-holding for a $1.6 million package of accounting and human resources software that the village bought in 2003, well before Barwin became village manager. The software is typically used by Fortune 500 companies and universities. Governments on the scale of New York City and large counties have this software, which has come to be known for the extensive support needed to use it.
“We bought a 16-cylinder Jaguar when we could have bought a nice Chevy,” Barwin said of the village’s purchase of PeopleSoft.
A review of national news reports about PeopleSoft shows that many municipalities and institutions using this software have invested in a decade of full-time tech support for it. Consultants who treat PeopleSoft problems where there is no in-house support often charge $175 to $200 an hour. Grochowski, whose résumé shows PeopleSoft experience but who had not incorporated her firm until getting the Oak Park contract, charged the village $125 an hour.
Johnson and Hale, along with trustees Jan Pate and Greg Marsey – none of whom are up for re-election this year – made up a board subcommittee formed to look into the hiring and payment of Grochowski.
The investigation was carried out at cost of $5,000 by R.E. Walsh & Associates, a consulting firm in Oak Brook that the village has worked with before. The board also retained attorney William Sullivan at a cost of $2,500.
Hale and Johnson said there would be tighter oversight of all village payments.
“We’re going to meet with the manager on a regular basis,” Hale said, referring to new monthly meetings and weekly conference calls of the personnel committee with Village Manager Tom Barwin. The personnel committee, which is made up of Hale, Johnson and Village President David Pope, had been meeting with Barwin twice a year.
Another new step will be a finance subcommittee on which Johnson and Marsey will serve along with a yet-to-be-named member. Johnson said the finance subcommittee’s first meeting would be in the next 10 days and that the new subcommittee would also be working closely with Craig Lesner, the village’s chief financial officer. Lesner had recommended the consultant’s hiring.
What next with PeopleSoft?
Johnson pointed to a 4-inch-tall binder of Grochowski’s filings and said that although details of her hiring and procedures for her payment were questioned, her work was not.
“She did the work we paid her to do and even more,” Johnson said, referring to training manuals she compiled for village staff.
“She took our proficiency from about 20 percent to 60 percent,” Barwin said. He added, “The improvements that were made are going to allow us to get by and limp along for a period of time.”
Johnson said the new finance subcommittee will be reviewing whether to keep PeopleSoft. Barwin said the village has an opening in its IT department but that employment of a PeopleSoft technician full-time would be difficult to afford.