| 1/13/2009 10:05:00 PM | Email this article • Print this article | Top OP staff grilled by board
Trustees decide on 3rd party 'evaluation' of overpayment to software consultant
By MARTY STEMPNIAK
Staff Reporter
First posted 1/13/2009 9:48 a.m.
While most Oak Parkers were asleep Monday night, the village board was figuring out next steps in an expanding dispute over whether top village staff acted improperly in making $200,000 in payments to a software consultant - payments allegedly not authorized by the board.
During a two-hour grilling Monday, trustees expressed frustration and anger at the actions of Village Manager Tom Barwin and Chief Financial Officer Craig Lesner in cutting a series of checks to a software consultant. Each check was just under the $25,000 mark at which Barwin needs board approval.
"I am deeply disturbed and share some of the outrage with people that I have heard from today," Trustee Ray Johnson said at the meeting. "Tonight, my concerns aren't alleviated, and frankly, I have more concerns."
Trustee Colette Lueck, who is up for reelection in April, was the first trustee to suggest an outside investigation into the matter. "I think that it's a very serious situation that we find ourselves in," she said.
The board entered executive session at 11 p.m. Monday. On Tuesday morning, Village President David Pope issued a statement on behalf of the village board saying "an outside evaluator" would be brought in "to look into these areas of concern." According to the release, the review will be overseen by an ad hoc board committee of trustees Johnson, Jon Hale, Greg Marsey and Jan Pate.
Mid-morning on Tuesday, the village also issued an announcement of a 7:30 a.m. committee of the board executive session on Thursday, Jan. 15, to discuss personnel.
When reached by phone Tuesday morning, Barwin said, "We obviously made a mistake in interpreting the policy and, in my end, in not catching it. And we feel awful about it. We've apologized to the board and the community about it, or would like to, but I can only say it was from a desire to try to really correct and improve some of our internal operations related to finance, accounting, bookkeeping and get this software to do what it's capable of doing.
"I'm completely convinced there were no ill-gotten gains here. Craig has worked his tail off since he's been here, and we erred in having tunnel vision in trying to fix a problem that had been lingering here now for over five years."
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 outside support needed to use it.
At the time, PeopleSoft was being marketed to smaller communities, Barwin said.
The village board, back in mid-2007, green-lighted a contract of $75,000 to a company called JCG Corp. Lesner recommended the firm of Jennifer Grochowski, a PeopleSort consultant in Chicago.
Village officials, including Lesner, recommended paying Grochowski another $180,000 in 2008 to continue consulting on PeopleSoft. However, trustees sliced that item out of the budget, as part of more than $3 million in cuts going into 2008.
But the village ended up paying JCG Corp. another $204,000, at a cost of $125 per hour. Rather than going to the board for approval, village staff cut several checks to the consultant in small increments.
Barwin and Lesner said Monday they were doing what they believed the board wanted. Some trustees, though, questioned how staff allowed a contract to almost quadruple past its approved limit.
A review by the Journal of financial news reports shows that PeopleSoft consultants often charge as much as $190 an hour and work on multiyear contracts.
The board learned of the overpayments in August from an anonymous source, trustee Greg Marsey said in an interview Monday. Discussion on the matter was held off on until completion of the 2009 budget.
In an Aug. 15 confidential briefing to the board, obtained by Wednesday Journal, Barwin told the board that staff considered hiring Grochowski full-time, but that her consulting in Chicago on PeopleSoft was "too lucrative."
Barwin said that when he started work here in August 2006, he found "very serious issues" with Oak Park's accounting and finance processes. In some cases, he said, third parties were being paid twice; other times the village was not invoicing for work it had done.
PeopleSoft was only being used to a small fraction of its capacity, about 20 percent, and staff was having "considerable internal difficulty" operating the software, Barwin said. So the village set out to find a consultant to help get the expensive software running up to speed.
Lesner was hired as chief financial officer for Oak Park in March 2007 replacing Greg Peters, who retired the previous May.
Allegedly, Lesner had several conversations looking for a PeopleSoft consultant in the months following his hiring with no success. He got the lead for Grochowski through his wife's book club. The village did not seek a competitive bid for the work. Lesner said that he disclosed the consultant's relationship with his wife from the start.
In the August confidential briefing to the board, Barwin explained why the overpayments were allowed to continue on his watch.
"I think it is fair to say that I, the board, and Craig after his arrival, were simply just gut sick about the prospect of watching a $1.6 million purchase just five or so years ago, to be declared nearly a total waste and failure, and watch the effort flow down the drain," Barwin said in the memo.
The board approved the first $75,000 contract in August 2007. That was for a "gap analysis" to find holes in how the software was being used. Lesner said Grachowski succeeded in making that assessment, but further consulting was needed.
"Jennifer, when she came here, really closed these gaps," Lesner said. "Everyone on my staff will testify that her value was immense."
In an interview Monday, Marsey questioned Barwin's response to the situation.
"My problem with that at the time, and what has continued to bother me is that there was no recognition of what was done was wrong and borderline illegal, and some procurement needed to be put in place," he said. "I'm glad that this story is finally seeing the light of day so we can put the process in place so it doesn't happen again."
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Reader Comments
Posted: Sunday, January 18, 2009
Article comment by:
Nicholas Kitsos
Maybe this will become "consultant-gate" or "software-gate", leading to the discovery of broader possible corruption and the violation of public trust. This situation should not be dismissed as poor-judgement-in-the-name-of-service as spun by Tom Barwin. It is as it appears, and if not deceitful, then at the least, irresponsible in nature. The same could be said of those involved. This incident has been kept from the public for quite awhile. An "anonymous source" came forth in August '08. I recall at that time Tom Barwin was trying to leave Oak Park for a new job in Boulder.
Posted: Saturday, January 17, 2009
Article comment by:
David W. Ristau CPA
I agree with the post by Alayne Michaud: Why were all the checks exactly $ 24,999.99? This is only one penny under the legal requirement for board approval of a contract. Nine separate checks? And they didn't think anything was wrong with doing this?
Is there a bridge from Brooklyn they're trying to buy for Oak Park, too?
By circumventing the contract process, Mr Barwin and Mr. Lesner, as the daily operations officers in charge of running the village have breached their fiduciary responsibility.
My understanding of Village Manager style of governance is the VM style removes the president of the village board and its members from hands-on supervision of the day to day operations of the village, using policy decisions to be properly administered by the village manager and staff.
I don't believe the board can set policy, pass budgets, make budget cuts and provide oversight if the staff responsible for day to day operations can't be trusted to properly report costs. NINE checks for $ 24,999.99 is NOT proper procedure and I believe any professional with as much career experience as Mr. Barwin and Mr. Lesner have cannot with a clear conscience state "I didn't know...".
Remember Jeffrey Skilling and Ken Lay at Enron? They "didn't know" either.
So who is placing the call to Lisa Madigan? Isn't she the Attorney General of Illinois and responsible for legal oversight for Illinois municipalities?
Nine checks for $ 24,999.99.
Just coincidence.
Right.
You two (Barwin and Lesner) are doing Blago proud, aren't you?
Posted: Friday, January 16, 2009
Article comment by:
Catherine Smith
This isn’t about politics it is about public trust and the fact that NONE of our checks and balances worked in this case – including this newspaper. No one is willing to ask tough questions and if you’re not willing to do that you shouldn’t be on a village board – no matter the political party.
Missing is the fact that this board knew about these offenses since August, 2008 – why the outrage now? Because another newspaper saw fit to ask the tough questions and tell the public the truth. The board did not know that Lesner had a personal relationship with this “consultant” or that she quit her job and started her company 4 days before signing a contract with the village – presumably because she knew she was getting this lucrative contract. Why would Lesner and Barwin hire an inexperienced, questionably-related person to conduct an assessment of the village’s PeopleSoft implementation? Why wasn’t a RFP issued and where is the proof that Lesner looked high and low but was unsuccessful in finding a properly certified and credentialed consultant to do this analysis?
Top administrators have demonstrated that they will do what they want and be damned what elected officials tell them to do (and consequentially what those officials have told citizens). If that is how you want to behave then you belong in the private sector – except that you would have been fired immediately for these kinds of shenanigans if you were! A village manager with years of experience that doesn’t know how to correctly interpret the limit of his spending authority? GIVE ME A BREAK! His answers sound like a teenager who came home at 3 o’clock in the morning instead of his midnight curfew with the excuse – “oh, I thought you meant midnight in Hawaii not in Illinois!” $205,000 in overpayments is 8+ checks of around $25,000 each ($25k being his actual spending limit) all in an effort to hide the expense from the board. With Barwin’s interpretation of spending he can apparently spend until the checks start bouncing.
And a village board that doesn’t even know where the money came from – is it budgeted or not? Didn’t we remove that item from the budget? Oh, it’s a different budget item – from where? We don’t know. Are you kidding me?! Last fall we were told it was essential to fire 5 people and leaving 4 more positions vacant in the streets department (a front line service area to citizens) in an effort to save $250,000 in 2008 and make up for an end of year shortfall. Or was that to make up for this fraud? The village board certainly knew about the deception by then. Hmmm?
We have a cocky CFO who seems to think that after all his lying, covering up, and padding of his “friend’s” bank account he can tell us now that PeopleSoft isn’t for this village and he’ll be recommending how to spend more of our money on some other software. Through dishonest maneuvering Lesner hired an inexperienced newly-formed business consultant that milked us up to the very day that the village board found out about her. Remember too that Jennifer Grochowski, the consultant in question, signed a contract with the village that stated she was not to exceed $75,000.
At Monday’s meeting Lesner admitted there are finance employees who do not even know how to auto sum or auto filter in Microsoft Excel (basic push of a button functions) and that lots of data never ended up in PeopleSoft! You can’t get out of a program what you don’t put in. Everyone wants to continue to blame PeopleSoft instead of looking at the culture of the finance department. But Lesner has known this about his department for some time now so for all we know we paid $125/hour for a VERY high-priced data-entry clerk. One look at JCG Corp. invoices to the village and you will see that there is absolutely no detail – no record of what “project” she worked on (Lesner and Barwin claim they had a series of “projects” each under $25,000 for her to do), no detail of what she accomplished or who she dealt with – just a list of hours she supposedly worked for each two-week period. And two invoices (4 weeks) consistently added up to about $25,000 worth of time yet made no mention of, nor were they divided up by, “project”. She was in effect a highly paid full-time employee without the board’s knowledge.
An experienced business consultant should have been able to figure out the problems inside this department and PeopleSoft within the first few thousand dollars of a gap analysis and should have told the village that PeopleSoft can’t turn out what it doesn’t have entered in it or that employees who are so unfamiliar with how to use computer software have been a large part of the problem. If this consultant really closed the gaps and did the great job Lesner claims, then why couldn’t he generate a single accurate and inclusive PeopleSoft report for trustees throughout the entire budget session last fall (after spending $280,000 on this consultant)? A very telling sign is that the printout listing all JCG Corp. invoices and totals was done in a Microsoft Excel spreadsheet (not PeopleSoft) and given to the board Monday evening. That my dear taxpayer is not closing a gap!
Perhaps continuing to send money on PeopleSoft was a way to keep the ready-made excuse alive for why the village doesn’t have its finances in order. Think about the hidden millions in deficits for the parking fund, filings not done on time, people being paid double or triple on an invoice, shortfalls in the end of 2008, and the village being behind in TIF fund payments to other taxing bodies. How about the battle now between the village and the library about money owed for maintaining the garage? Did the village “ignore” years of back dollars for the garage as Trustee Johnson now claims or were the finances so bad at village hall that they didn’t even know they weren’t paid for years? (And with all this nebulous math coming out of village hall, I wouldn’t pay a village invoice if I were the library either.) If you don’t keep PeopleSoft alive then you lose your convenient excuse for apparently everything.
And then there is Village Attorney Heise who now claims that “he was asked about the payment procedure and advised against it” (see Chicago Tribune, January 14, 2009). When was he asked his legal opinion regarding Barwin’s spending authority and about the payment scheme concocted to hid $205,000 in additional payments to Grochowski? If he knew Barwin was asking about this why didn’t he later go looking to find out that Barwin actually made the payments and call him out then? The citizens have a right to know this information and the village board should not exacerbate their own wrong-doing by concealing Heise’s recollection of events or his own culpability as they are trying to do with keeping Heise’s memo from the public. Trustee Marsey and even Manager Barwin indicated that Heise’s memo was essentially his own recollection of events and it is bad government to hide its contents from citizens by saying that it is now somehow attorney-client privilege. Who is the ultimate client here if not the citizens of Oak Park? Most importantly, back in August 2008 why didn’t Heise inform the village board that they HAD to make this information public when the board first found out about the overpayments through a tip given to Trustee Marsey? That is called checks and balances people! What is a legal department for if not to constantly make sure that employees stay on the right side of the law and trustees adhere to OPEN, honest, legal government!
Our administrators failed us, our legal department failed us, and our village board failed us. The time for an investigation was August, 2008! Lesner, Barwin, and Heise should be on unpaid-leave until this is properly investigated by external means, their bank accounts should be investigated, their computers and files should be confined, Grochowski should – at the very least – be held accountable for violating her contract with the village, an outside auditor should evaluate Oak Park’s system of payments and procedures, and no one should be running for re-election to the village board.
Posted: Friday, January 16, 2009
Article comment by:
David McCammond-Watts
I'm glad the board, lead by President Pope, is bringing in an outside investigator after taking both the manager and CFO to task in an open meeting. The board is acting responsibly to fully, publicly, and independently get to the bottom of this situation.
Posted: Friday, January 16, 2009
Article comment by:
Paul Beckwith
I support the board in there intensity to investigates what and why this $200,000 was handled the way it was.... Often in managing a number of projects,or involvment in well over 25 issues per day, this can happen. Based upon what I understand, the investigated was the correct way to go.....also I think the rest of us should support our local businesses in any way we can and not get so preoccupied in this event...we have a very good village board, and they will handle effectively.
Posted: Thursday, January 15, 2009
Article comment by:
Lee Seitelman
Congratulations to the Wednesday Journal for publishing a thorough, measured, and non-sensational account of what is known about the Village expenditures for consulting services regarding the Peoplesoft software. Too bad the online comments have generally been lacking a similar attempt to get the facts straight. Rather than fabricating conspiracy theories or slinging partisan mud, the community would be best served by a thorough, measured, and non-sensational effort to gather all the facts and determine what went wrong and why. And that, as far as I can tell, is exactly what the Village Board is trying to do (and what, I'm sure, the Wednesday Journal will continue to do).
Posted: Thursday, January 15, 2009
Article comment by:
Thomas Steffens
The corruption and waste in this community is endemic and we've only seen the tip of the iceberg.
In recent times we've had the Malatesta issue at the high school, the ADA violation, manholes-in-the-soccer field, and flooded ballfields fiascoes at Field, cost overruns and criminal and civil lawsuit fever at the park district, and now the possible Pope/Lesner/Barwin kickbacks and corruption.
The common element among all of these is that there is no divulging or accountability until a whistleblower discovers the truth. Then, in every single case, those responsible for the corruption, waste, and incompetence claim they were aware of the problem and were working on it. Make me gag. The only things missing from the spins and the songs and dances coming from Constance Collins at D97, David Pope at the village, and Gary Balling at the parks are the tutus and the orchestra.
It's just the tip of the iceberg. We don't need a committee of the VMA village board members to "investigate" this latest bilk of the beleaguered Oak Park property taxpayers. We need to bring in the U.S. Attorney for Illinois, and get rid of these bums, either by throwing them in jail or voting them out of office, and see just how deep at the high school, the village, and the park district that this behavior goes.
Posted: Thursday, January 15, 2009
Article comment by:
JM Konecki
Most of the comments posted here sound very political in nature.
Its unfortunate that people convict others of things when the data isn't even in!!! Our village board and village administrators are very intelligent and capable folks who make this great village run.
So many times in Oak Park, residents are so quick to complain about things that can be improved, but rarely do they ever look at the solution side of the equation.
Lets all agree that there is plenty to improve and if we all concentrate our energy and resources on solutions we will all be that much better becasue of it.
The election isn't until April, so please tone down the rhetoric and stay focused on the true content at hand.
Posted: Thursday, January 15, 2009
Article comment by:
Jo Ellen Davey Cohen
Salt-of-the-earth Village employees (including Marilyn Michaels/'Village Voice') were sacrificed in the layoffs to subsidize an overpaid software consultant. President David Pope has survived as the face man for the VMA extravagant spending and the massive budget boondoggles. Pope's fruitless study sessions have placed the taxpayers on the 'bridge to nowhere,' and have bankrupted the public trust. David Pope and company are not equipped to usher in the 'change we need.'
Posted: Wednesday, January 14, 2009
Article comment by:
Bill Maxwell
Here’s some news to anyone who really cares how their tax dollars are spent by the Village Board, Village Manager and the Chief Financial Officer.
I had a 10 minute conversation over a glass of seltzer water about what happened. In that 10 minutes, I found out that PeopleSoft is not for a small Village like Oak Park. It requires a lot of hardware and staff to maintain and unless it was a stripped down version, it was over sold to a very uninformed representative of the Village who wasted taxpayers money.
I have a feeling I can take this person’s knowledge seriously, because he too, has a consulting company, and now is working with Oracle. Look up Oracle if anyone doesn’t know the companies size or what type of qualifications are needed to work with them.
Now comes the second part. In walks a consultant recommended by the Chief Financial Officer. Lets remove the fact that the payments were divided up which most of us would consider not the way the public trust should be respected, but maybe we have grown use to it after 8 years of it coming out of Washington.
But this is Oak Park. A small Village of hard working people who for the most part are suppose to be educated well informed people who really care about the quality of it’s schools, Police and Fire services and all that encompasses a Village that prides itself as being an innovator.
How does a consultant walk in to a 75 thousand dollar contract, doesn’t question the smaller payments and doesn’t have the smarts to say in the beginning, PeopleSoft is wrong.
Remember, this is a consultant. A consultant is suppose to be a professional adviser to people who don’t know about something and need advice so decisions can be made.
I generally disagree with hiring consultants when commonsense and a little effort can be used. Why didn’t anyone question what is the problem with this software? The next question is, is there anything else we can use?
For payroll for an average size company of 200, or even larger, there is a software program called PeachTree that will do the job. If you want to know how much it is, just google it.
With an accountant setting it up, it can run on it’s own, is user friendly, and all that is needed is a small server.
Once again, anyone who really cares about how their tax dollars are spent should question why is the village broke?
Does anyone spend their personal finances the way the Village spends our tax dollars? Why is it, that management is the last to go when a company is failing. A company fails from the lack of good management.
I have to admit, I never really had any interest in how our Village operates, because it always seemed to do things in a just and fair way, and I know that we have an excellent Police and Fire Department. Beyond that, nothing seemed to matter much because I just trusted everything else was held at the same level of integrity.
But now I have some questions from anyone who knows, including the Wednesday Journal. Are Board Members paid or volunteer and either way, what are the qualifications? Who hires the Village Manager and Chief Financial Officer? Most importantly, when can we change the keepers we trust with our tax dollars including the board?
The only one that I would strongly support is Mr. Marcey, who sits on the board. The reason is, he doesn’t seem to have much patience to just sit and talk for a couple hours a week. He seems very interested in the development of Oak Park, with a common sense approach.
I would suppose if Mr. Marcey, was Board President, he would take all the other members into a room, make sure each one was awake, and ask, “Do you really think we should spend money on another consultant to tell us what just happened to the tax payers money?
Posted: Wednesday, January 14, 2009
Article comment by:
jean heyes
Perhaps the Big Boys should voluntarily donate part of their saleries to the cause. Or is it typical Oak Park - let the taxpayers pay as usual. A change is more than needed!!!!
Posted: Wednesday, January 14, 2009
Article comment by:
gg
I believe the act of transfering public funds to a family friend can be considered a criminal act. Whether or not the principals involved believe the act to be criminal does not change the facts. The manager, the CFO and Mr. Pope all should know the laws given their positions.
If your teenager took the keys and car without permission, what steps would you take?
Would you call the police?
Would you negotiate?
Trouble is these are professionals, not teenagers.
Posted: Wednesday, January 14, 2009
Article comment by:
Mary Ellen Eads
Well, it does seem clear that when the Village lets a contract, we have no idea what amount the contract is really for. Not exactly transparent government.
There are two posibilities here. One is that either the Board was complicit in this matter, somehow having signaled, wink, wink, that Barwin should simply issue the overage via smaller checks to evade procurement regs. Or perhaps Mr. Barwin holds the Board in such contempt that he views it as an obstacle to be got around with maneuvers like this one.
Either way, Oak Park's good government image has taken a big whack.
Posted: Tuesday, January 13, 2009
Article comment by:
jean heyes
Now that it has hit the fan, watch the boys squirm! We cannot afford to salt our streets, let alone repair them. We cannot afford a new life-saving ambulance (that might rescue anyone in the Village from the grip of death), but we can watch our hard earned money leap out of the window and down the drain!!!!Lake Street looks like a bomb has hit it- due to the lack of small businesses, but we continue to pay for the Big Boys saleries and ALL their assistant staff while they wile away our tax dollars. President- elect Obama wants CHANGE. Looks to me as if we, here, need Change, too.
Posted: Tuesday, January 13, 2009
Article comment by:
Jo Ellen Davey Cohen
The U.S. Attorney for the Northern District of Illinois, Patrick J. Fitzgerald would be the citizens choice for an 'outside evaluator' with respect to public corruption in the Village of Oak Park.
That Barwin and Lesner are the obvious ready made scapegoats in this saga, does not clear Pope from complicity in the matter. David Pope is the President of the Village, and must bear the responsibility of negligence in oversight of the Village Manager when did Pope know about the improper funneling of taxpayer monies? What was his seasoned response? The buck stops with David Pope.
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