Amid fight over rebuilding George Wythe, city officials sought change in 2020 audit’s findings
City officials are continuing to push back on an internal audit of the city of Richmond’s recent school construction projects. That comes amid an ongoing fight between the mayor’s office and school board about who should be in charge of building schools going forward.
A public records request filed by VPM News revealed efforts by Richmond’s Chief Administrative Officer Lincoln Saunders to change the findings of a 2020 audit that found Richmond’s recent school construction costs higher than Chesterfield County's and the state average.
The audit was published in December 2020. But in a Jan. 26, 2022 email, Saunders asked Richmond’s independent auditor Louis Lassiter if he’d consider updating the audit to include construction costs for a few other schools in nearby localities.
Saunders sent over VDOE information for a handful of schools either recently constructed or still under construction, including two Henrico County high schools, a Campbell County middle school and a New Kent County elementary school.
Saunders highlighted the square footage cost of the New Kent elementary school, for which the contract was awarded in January 2021. That school is still under construction, according to a district spokesperson. At first glance, it appears to have cost “a penny less” per square foot than the replacement for Richmond’s Greene Elementary, which Saunders also highlighted, with a contract award date of February 2019.
Lassiter replied, saying the schools Saunders pointed to were outside of the audit’s scope and couldn’t be directly compared.
“Thank you for this information my staff and I have looked it over. Our audit focused on schools with contracts awarded in 2018-2019 for elementary and middle schools in region one. The data you provided for elementary and middle schools is for contracts awarded in 2020-2021,” he said. “We have checked inflation numbers from the Bureau of Labor and Statistics not only for regular inflation, but also for PPI industry data for new school building construction. Based on changes in inflation since 2018-2019, it would not be comparable. Feel free to call me if you have any questions.”
Nearly two months later on March 22, Saunders sent a text message to Lassiter stating, "your audit on school construction is being used to beat us over the head on false premises.”
Lassiter did not respond to the text message.
“What I've tried to emphasize either in my outreach to the auditor, or in our conversations is that how we present this data is important because how the public perceives the trust they placed in us to use their tax dollars to support our children and families is important,” Saunders said in an interview with VPM News about the pushback.
March 22 was the same day that Mayor Levar Stoney and Saunders both spoke at a city press conference touting the alleged superiority of the city’s construction management system, compared to what the school board has planned.
Stoney expressed an urgency to get construction of a new George Wythe High School underway; urgency is often cited as a reason to proceed with Construction Manager-at-risk, the construction contract model the city has used previously.
Other city officials – including Deputy Chief Administrative Officer Robert Steidel and Interim Chief Capital Projects Manager Robert Stone – noted this urgency as part of their justification for the increased costs associated with past school construction projects in a November 6, 2020, response to Lassiter’s audit.
“A real urgency existed to construct and open three new schools by the fall of 2020,” the letter stated. Another section reiterated this point: “The very real and immediate needs of Richmond’s children, teachers and staff dictated the schedule for these three new schools.”
Lassiter declined an interview with VPM News because he said, “as an independent auditor, at this time I prefer not to perform an interview as I do not want to be perceived as anything but independent.”
However, in an email to VPM News, Lassiter pointed out that his team had already adjusted the square footage costs down slightly at city management’s request for the replacements for Greene Elementary and George Mason.
Data reported to VDOE showed Greene’s cost at point of contract award was $311.44 per square foot, but Lassiter’s audit adjusted that down to $308.23. For Mason, Lassiter’s audit adjusted the $347.19 per square foot cost figure reported to the VDOE down to $342.99 per square foot.
Lassiter stated via email that “at the time, they [management] indicated new information was being updated to send to DOE. I wanted us to be as conservative as possible in reporting.” He pointed to an audit footnote he added to reflect the adjustment: “Management provided updated DOE information for the City’s schools’ cost to the Auditors on 10/6/20 as well as capacity update information on 10/8/20.”
The VDOE figures for Richmond schools did not change; city officials maintain the VDOE figures include “allowances and contingencies which may or may not be utilized.” VPM News did not receive confirmation of the reduced costs.
Despite Lassiter’s response denying Saunder’s request to update the audit, Saunders has continued working to invalidate the city auditor’s analysis.
“Our team has pulled the numbers and has done a similar comparison,” Saunders told VPM News. “This is where data can be parsed in different ways to tell a different story.”
VPM asked for and was sent a copy of that analysis, though it’s still not clear who exactly put together the analysis and using what methodology.
Saunders insists that a comparison of construction costs between Richmond and Chesterfield County is unfair – telling VPM News there are “higher costs of school construction particularly in urban environments,” though he could not point to an independent review verifying this.
He also noted that Richmond’s schools were LEED-certified, which added to the cost.
“LEED standards generally increase your cost between 5 and 10%,” Saunders said.
The audit also noted that LEED certification can impact building costs.
Saunders also pointed to high site and demolition costs for George Mason Elementary’s replacement. However, according to VDOE – demolition costs were not included in data reported to VDOE for George Mason, though it typically is included. A city spokesperson told VPM News via email that “at the time of the report, we did not have the cost for Mason’s demolition. The demolition permit for Mason was issued on Dec. 6, 2021; with final structural demolition commencing on Dec. 14, 2021, and completed in late January 2022. The total cost of demolition and site restoration was $1,027,846.”
Drew Harmon, auditor for the city of Roanoke, says he’s known Louis Lassiter for 25 years.
“Lou has many years of auditing experience, including county, city and state experience,” Harmon wrote in an email to VPM News. “He also worked in the County Executive’s Office in Chesterfield for a time, which gives him some unique perspective.”
Based on his reading of Saunders’ requested update, Harmon wrote, “I would agree with Lou that comparing 2021 numbers to 2018/19 would not be valid. Not only due to historic inflation, but also due to changes in air quality and other construction requirements coming out of the pandemic.”
Harmon pointed out that Richmond is a peer-reviewed department, “and I would expect their audit processes to be very sound and reliable,” he said.
Chris Horton, president of the Association of Local Government Auditors, also pointed to the peer-reviewed designation in an interview with VPM News. He says getting that designation involves a third-party review every three years.
“Typically a team of about three people who will come in and really do intensive deep dives into the working papers and into your audit management system,” he said.
In addition to that, Horton pointed to government audit standards promulgated by the General Accountability Office that require an intensive internal review process.
“That includes an opportunity to vet internally facts and conclusions before the audit is even drafted. And even during the audit drafting process it goes through multiple stages. It can be quite onerous,” he said, adding that auditors meet with city management before publication to seek input and give management an opportunity to provide any additional relevant data.
“The purpose of that is to make sure that when you issue even a draft report that you know, to a high degree of confidence, that your facts are correct, that they are documented, they are documented with reliable and valid evidence that's appropriate to the conclusion,” Horton said.
He added that some pushback to audits is normal, though the intensity of that pushback varies. Almost always, he says, requests to update already published audits are denied.
“Unless the audit got something factually wrong, then the answer is no,” Horton said.
According to Lassiter, 97% of Richmond audit recommendations in recent years have been agreed to, which he said via email illustrates the collaborative nature of the city’s current administration staff.
In fact, for FY19-21, Lassiter said only 10 audit recommendations were not agreed with. Three of those rejected recommendations are part of the school construction pushback.
Kristen Larson, a City Council member who’s served on the city audit committee since January 2021, says the intense level of pushback from city officials to the school construction audit concerns her.
She also noted Lassiter’s experience working as a government auditor for over 30 years and his professionalism.
“I haven't heard of an audit being issued and then coming back two years later, and putting in a request to change the findings,” Larson said. “They've contested a lot of this from the beginning. And it's really concerning, because the data is what the data is.
“Trying to discredit something that had at least 100 hours of work on it is unfortunate. I think how we could better approach this is really to look at the findings of the audit and say, ‘How can we do better with our tax dollars? How can we be more efficient? What changes can we make so that we are more efficient in school construction?’”
Joe Kearfott, chairman of Richmond’s audit committee, told VPM News he has “no reason to believe that any of the numbers that were produced by the city auditor's office are in any way inaccurate or incorrect.”
Richmond’s auditor is hired by – and reports to – City Council, Kearfott noted. But the city auditor, per normal protocol, only follows up on recommendations the mayor’s administration agrees with.
In other words, City Council is the agency responsible for following up with any audit recommendations that city officials don’t agree to.
“The city auditor does not follow up on recommendations that a city department disagrees with,” Kearfott said. “When the city administration or the department disagrees [with a recommendation,] then basically it is left to City Council and the administration to deal with it.”