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State comptroller: Eastport-South Manor didn't seek competitive proposals

Tim Laube, left, the Eastport-South Manor district's assistant

Tim Laube, left, the Eastport-South Manor district's assistant superintendent for business, and recently named Superintendent Joseph Steimel are charged with putting the state auditors' recommendations into place. Credit: Newsday/Thomas A. Ferrara

The cash-strapped Eastport-South Manor school district failed to seek competitive proposals for more than $1 million in professional services, ranging from physical therapy to legal representation, state auditors reported. 

Staffers from the state Comptroller's Office, a fiscal watchdog agency, also found the district did not have written contracts detailing services to be provided by some outside professionals brought in to provide services. Those professionals included an architect, a behavioral analyst, an engineer and a private investigator who were paid a total of $325,000. 

Eastport-South Manor operates on an annual budget of $96.5 million, and has faced chronic funding problems in recent years, as revealed in a series of state news releases. State auditors noted in their report issued Friday that the district could not be sure it was getting the best services at the lowest price possible if it did not follow its own fiscal guidelines.

Without written contracts, auditors said, "There is an increased risk that the district will pay for services it has not received. Further, because officials did not always seek competition to secure professional service contracts, these services may not have been obtained for the best price."

Eastport-South Manor authorities said they agreed with recommendations from the comptroller's office, and already had invited bids — known as RFPs or Requests for Proposals — for legal and auditing services. RFPs for architectural, medical and therapeutic services will be issued in June, authorities said. 

Joseph Steimel, a former principal in the district who took over as acting superintendent in April, informed auditors in a letter that his district planned to issue RFPs for various categories of professional services at least once every five years, and to document any exceptions. Steimel added that contracts awarded in the future would list both fees and services to be provided. 

"The district appreciates the opportunity to work with your staff," the superintendent stated in his response letter to the comptroller's regional center in Hauppauge. 

The letter went on to state that Tim Laube, the district's assistant superintendent for business, and Linda Weiss, the assistant superintendent for personnel, were assigned to putting the auditors' recommendations into place. 

Steimel became superintendent in July. 

While traditional bidding for professional services is not required by law, state statutes do mandate that school boards adopt written procedures for obtaining such services. Eastport-South Manor has done this, but the comptroller's office found the district often did not observe its own rules. 

For example, state auditors reviewed payment claims from 16 professionals totaling more than $1.4 million, and discovered that 10 professionals were awarded in excess of $1 million without competition. Expenses included $691,024 for physical therapy, $192,157 for an attorney and $58,828 for an architect.  

The architect and a Medicare consultant both received payments for 10 years without bidding, auditors reported. The state's review covered Eastport-South Manor's payments to outside professionals between July 1, 2017, and Jan. 31, 2019. 

Eastport-South Manor enrolls about 3,200 students in communities straddling the Brookhaven/Southampton town border, and its taxable wealth is about 20 percent below the state average, according to the latest data from the state Education Department. 

Since 2016, the district has appeared on a statewide "fiscal stress" list compiled by the comptroller's office. During the 2018-19 school year, Eastport-South Manor officials cut more than 70 staff positions to stabilize the budget. 

In March 2018, when those economy moves were under discussion, district officials also raised the possibility of closing one of Eastport-South Manor's four elementary schools. Steimel said Tuesday the district has no plans to close any building. 

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