State official grilled about school construction audit

Michelle Gilman, who was nominated for a full term as commissioner of the state Department of Administrative Services, was grilled Tuesday by lawmakers who are unsatisfied with a recent audit of the state’s controversial school construction program.

That program, which is overseen by DAS, landed in the center of a federal grand jury investigation last year after questions were raised about how millions of dollars in state grants were awarded to local school building projects.

Gilman, who was first nominated to serve as DAS Commissioner last year, was appointed to that post after the federal investigation came to light.

On Tuesday, she was questioned by lawmakers on the Executive and Legislative Nominations Committee during her nomination hearing about how she and the agency have responded in the wake of the federal investigation to address concerns from municipalities that rely on the program to refurbish or build schools.

To showcase the agency’s response, Gilman pointed to an independent audit that was recently completed on the school construction program. That audit examined records for 111 different school projects that received grants between 2018 and 2021.

Gilman, who was eventually confirmed by the committee on an 8-2 vote, assured legislators that under her leadership the agency was moving to “rectify the wrongs” with those projects.

“We’ve taken a number of steps to restore trust in that program,” Gilman said, “And we recognize that it may be some time before there is full trust and confidence in that program.”

Several Republicans and one Democrat, however, pressed Gilman about the scope of the audit and questioned whether the 23-page report would actually correct the most serious issues exposed last year.

Local officials from several towns alleged in the wake of the federal investigation that Konstantinos Diamantis, the former director of the school construction office, pressured them to hire specific contractors for their school projects. Those allegations included contracts for construction administrators, general contractors and demolition and remediation companies.

Yet despite those allegations, Gilman and the other leadership at DAS did not instruct the independent auditors to speak with local school districts or to explore whether Diamantis sought to steer any contracts to specific companies. Instead, the audit focused narrowly on the paperwork and processes that the state uses to manage the individual school projects.

Diamantis, who stepped down from his posts in state government in late 2021 amid multiple investigations into his conduct, has denied any wrongdoing.

Even so, several Republican legislators who took part in the hearing Tuesday said they did not understand why the state did not instruct the auditors to speak with the town attorneys, school superintendents and local elected leaders who claimed they were pressured by Diamantis when he ran the program.

“Why not get right to the heart of the matter?” asked Sen. Henri Martin, a Republican from Bristol, one of the towns that was allegedly instructed to hire a specific demolition and abatement company that was recommended by the state.

Gilman told lawmakers that municipal officials were not questioned because the scope of the audit was focused on reviewing the documentation that the state collects after each school construction project is completed.

She also suggested it would be inappropriate for the state to look into matters that were potentially being investigated by the FBI and a federal grand jury.

That explanation didn’t stop the flurry of question from state lawmakers, however.

“Many of us legislators feel that we’ve evaded the real issue,” said Sen. Heather Somers, R-Groton.

Somers said it was vital for DAS to investigate what happened with school construction contracts in the past, especially since the state borrows billions of dollars to fund those projects.

House Minority Leader Kevin Kelly, R-Stratford, pointed out that Gilman could have changed the focus of the audit if she wanted to, and he questioned whether the roughly $240,000 that the state spent on the report was worth it.

“You defined what you wanted to look at. But you are not looking at what we would like to look at,” Kelly said. “Whenever the federal government investigates conduct and issues subpoenas, it’s not a good day.”

Rep. Tammy Nuccio, RTolland, was even more blunt about the situation. She said DAS could not expect the independent auditors to get at the root of the problem if they weren’t allowed to ask the right questions.

Nuccio, who is a financial analyst, said there was a phrase for that in her industry. “Garbage in, garbage out,” she said.

Nuccio specifically referenced the Birch Grove Primary School project in Tolland, where local officials alleged they were told to hire a specific construction administrator and general contractor for the project without any bids.

Those allegations can’t be investigated by looking at state paperwork, Nuccio said.

The Republican lawmakers asked Gilman whether she would consider, or support, expanding the scope of the audit to examine past interactions between municipalities and the state school construction office.

But Gilman told lawmakers that she had no plans to commission that type of analysis or to delve any deeper into the past work of the school construction office.

Even so, Gilman said DAS continued to encourage the leaders of municipalities and school districts to come forward with any issues they encountered in the past.

As an example, Gilman cited New London, where local officials were recently told the state will not pay for roughly $4 million in demolition and abatement work for a new high school project.

The state is refusing to cover the cost of that work because New London did not solicit competitive bids before it hired its demolition contractor, as state law requires. Local officials have alleged, however, that they were following the advice of Diamantis when they hired a contractor preselected by the state.

Gilman told lawmakers that she expects other issues like that to pop up as the new leaders of the school construction office continue to review recently completed school projects.