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CityTime Payroll Manager Fired Over Pay Scandal

Thursday, May 26, 2011

The prime contractor for the Bloomberg Administration's scandal-plagued CityTime payroll project has now admitted the official in charge of the project never kept track of his hours.

This latest disclosure comes as federal prosecutors and the city's Department of Investigation press ahead with a widening criminal probe that has already led to several indictments.

In a letter to the city, Rick Reynolds, Senior Vice President for Science Applications International Corporation, wrote that Gerard Denault, SAIC's project manager on CityTime "violated SAIC's policies and standards with respect to his timekeeling practices while working on CityTime." A call to SAIC was not returned.

According to Reynolds, SAIC terminated Denault, who had "performed extensive work on CityTime" to "demonstrate our good faith in dealing with the city."

SAIC also committed to send the City a $2.5-million dollar refund "for all of Mr. Denault's billed services." Denault has denied any wrongdoing.

City Comptroller John Liu says the admission raises more questions than it answers.  

"That's two and half million dollars for time from just one person, the lead project manager. It begs huge questions as to what else might be involved," said Liu.

In a letter to Mayor Michael Bloomberg, Liu said pending a comprehensive review of all of SAIC's billing, the city should withhold any money that is still due SAIC, whose contract expires at the end of the month.

"To date, the alleged fraud relating to CityTime has only involved subcontractors. This latest development now implicates the prime contractor and compels a comprehensive review of SAIC's billings to the City," Liu wrote Mayor Bloomberg.

Liu says he wants to know just how many SAIC employees were on the CityTime project, and he is skeptical that the project's top manager was the only person allegedly manufacturing phony time sheets.

“That certainly is one of the concerns," asks Liu. "How many people were really billing their time? Were they all following practices with the exception of this one person?"

In a phone interview, Liu said he estimated that SAIC had received the lion's share of the $700 million earmarked for the project that began in the Giulinai era with $63 million dollars but has balloned under Bloomberg.

In a statement issued for Mayor Bloomberg by his spokesman Marc LaVorgna, the administration said it had already started a "forensic audit" last year when the questions of possible wrongdoing first surfaced.

"We will withhold any and all payments until the completion of the Department of Investigation’s ongoing review," read the statement. Lavorga estimated SAIC is still owed $32 million dollars on the CityTime contract.

In SAIC's letter to the city, the contractor said the CityTime project was a "one of a kind, world class system that gives city managers a powerful tool to plan and manage their workforce." SAIC estimates that more than 163,000 city employees from 67 departments and agencies are now tied into the modernized payroll system they say is now 95 percent complete.

Representatives with the city's public employee unions have testified before the City Council that the project's pricetag was vastly inflated and that its effectiveness is being hyped by the Bloomberg administration. Anecdotal complaints include that the new system requires the same number of people to function as the old system.

Federal prosecutors have already charged several people they say were part of on an elaborate conspiracy that included CityTime sub-contractors that allegedly ripped off $80 million dollars from the city of New York. The case turned a spotlight on how vulnerable the city was once it actually sub-contracted out the quality assurance and oversight of the massive CityTime contract.

The cost overruns and irregularities on the CityTime contract were first raised by Brooklyn Councilwoman Letitia James and Daily News columnist Juan Gonzales two years before the criminal case surfaced.

The mismanaged CityTime contract had become a focal point for the city's public employee unions like District 37 who contended that under the Bloomberg Administration outside contracts had spiked into the billions of dollars even as the mayor began to layoff municipal workers.

The Bloomberg Administration says much of the so called outside contracts the unions complain about are for long standing community based social service work.

But in the aftermath of the CityTime scandal, which hurt Mayor Bloomberg's image as an able manager, the Mayor did appoint Deputy Mayor Stephen Goldsmith to undertake a comprehensive review all of the City's big ticket information technology contracts.

Goldsmith did find that the City had become a captive of the contractors who gave the City the work product they wanted and not what the City required. And the Deputy Mayor conceded the union's point that the City could do a better job utilizing its own workforce to manage the outsourced IT contracts.

In an interview following the release of his recommendations earlier this year he said he was also concerned about the implications for the City when its' managers left their public employment for positions with the very same private contractors they had overseen as public employees.

The latest SAIC bombshell will be fresh ammunition for the City Council. The Council is targeting the Bloomberg Administration's big ticket outsourcing as a way to find money to save 6,000 teaching positions and to stave off the possible closure of 20 fire companies.

City Council Speaker Christine Quinn has suggested outside contractor all be required to roll back their fees a certain percentage to help the City balance its budget. The Mayor and Council have until the end of June to reach a budget deal.

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