Another Technological Boondoggle By Bloomberg That Is Going To Cost The City Millions

Want to know why the DOE couldn't find seats for incoming kindergartners with special needs for 2011 and now may have to pay for private school for those kids instead?

Because the computer program the DOE uses - a program that costs over $54 million - sucks:

Schools Chancellor Dennis Walcott is blaming the Department of Education's $79 million overhaul of special education programs for costly delays in finding seats for disabled kindergartners.

The agency missed its June 15 deadline for finding slots for about 2,500 kindergartners with special needs - and now the city could be liable for the kids' tuition in private schools.

Speaking at Tweed courthouse yesterday, Walcott pinned the holdup on the agency's switch to a new, Web-based system for tracking students with disabilities, called the Special Education Student Information System (SESIS).

"As a result of the transition to a computer system, those delays are there," said Walcott, referring to the new computer system that the Education Department paid Virginia-based MAXIMUS corporation $54.9 million for in 2009.

At the time, the agency also set aside another $23.7 million to implement SESIS over the next five years. The total cost of SESIS works out to about $600 for each disabled child currently enrolled in the city's public schools.

The program is supposed to ease the schools' delivery of services for disabled students by providing a system for tracking students' needs, but some teachers say it's riddled with problems.

They say they never received proper training, schools don't have enough bandwidth to run it properly, and they wait up to two hours when they call the program help line.

"It's impossible to know how many kids throughout the city aren't getting services because of problems with SESIS," said Julie Cavanaugh, a special education teacher at Public School 15 in Red Hook, Brooklyn.

"It's not functioning properly - there's a serious flaw in the design," said Cavanaugh, adding that it's taking her twice as long to create records for students with disabilities using the new system.

Officials authorized schools to use emergency funds - essentially overtime - to pay for teachers to try to find seats for the incoming kindergartners on evenings and weekends.

Kids who didn't get seats are entitled to a private education paid for by the city under a 1988 legal ruling.

Tuition at approved private schools can exceed $30,000 per year. The city already spends about $100 million to educate about 4,000 kids in this situation.

Who signed off on using a new computer program to track students' needs that has serious design flaws?

Chancellor Klein did.

Here is the press release that MAXIMUS, the company that provides the shitty program to the city, put out in 2009 when they got the contract.

Here is what Klein said at the time (as quoted in the MAXIMUS release):

In a separate release issued yesterday by the New York City Department of Education, Schools Chancellor Joel I. Klein commented, “The new Special Education Student Information System represents a much-needed upgrade in how we perform vital special education activities, and demonstrates our continuing commitment to improving outcomes for our students with disabilities.”

How's that vaunted upgrade in how the DOE provides vital special education activities working not that they've handed over $54+ million to MAXIMUS?

About as well as you'd expect when you hire a crooked company convicted of Medicaid fraud.

Here is that story from back in 2007:

Monday the Department of Justice (DOJ) and Maximus, Inc., both announced via press releases that the Reston-based government contractor had reached an agreement with the U.S. Attorney's Office in Washington D.C. and the Justice Department's Civil Division.

Maximus, Inc., is a well-known government service company that provides consulting and program management services. In this case, the company had a contract with the District of Columbia's Child & Family Services Agency (CFSA) as a reimbursement consulting firm for CFSA's foster care program. After investigation initiated by a whistle-blower's federal civil lawsuit against Maximus, Inc., it was determined that the company had caused CFSA to submit claims to Medicaid for foster child services that had not been provided.

The civil lawsuit was filed by a former Maximus, Inc., division manager under the False Claims Act. A review was conducted by the Department of Health and Human Services (HHS) Centers for Medicaid and Medicare Services that determined CFSA could not support 35 percent of its claims. As a result of that investigation, Maximus, Inc., paid $12.15 million, of which $4.93 million went to the whistle-blower.

The parties have now entered into a deferred prosecution agreement, a civil settlement, and a corporate integrity agreement to resolve the matter. Per the agreements, Maximus, Inc., admits responsibility for the actions of their employees, including a former company vice president, and will reimburse the government an additional $30.5 million. Further, the government will not file any criminal charges, but reserves the right to do so if Maximus, Inc., fails to comply with the agreements over the course of the next 24 months.

This sounds like EXACTLY the kind of company Bloomberg and Klein would hand millions of dollars to and it also sounds EXACTLY like the kind of company that would provide a computer system that does less than advertised and makes the work of providing special education services more difficult.

Just like IBM and Wireless Generation with ARIS, SAIC with CityTime and now MAXIMUS with SESIS, the Bloomberg administration has time and again wasted millions of dollars handing out boondoggle contracts to crooked companies and conducted little to no oversight of these companies as the projects have gone over budget, over time, and provided much less than promised.

This latest mess could cost the city tens of millions of dollars in extra expenditures. Under the law, they will have to provide private educations for the thousands of incoming kindergarten students with special needs who have not gotten admitted to a public school because of the SESIS mess.

As the Daily News reported, the city already spends $100 million to send 4,000 students to private school.

If they have to add another 2,500 to that list, you're talking at least $60 million in additional costs.

But the contract with MAXIMUS?

That's got another three years to go with two option periods for additional work.

Nice work if you can get it.

Company Involved In CityTime Money Laundering Shuts Down, Owners Flee The Country

Mayor Bloomberg thinks he did a heckuva on the CityTime project - at least that's what he told his radio audience last Friday.

But this doesn't sound like a heckuva job to me - it sounds like a widening corruption scandal that has seen the city looted of hundreds of millions of dollars:

WAYNE, N.J. — A New Jersey technology company that had been a major contractor on the Bloomberg administration’s troubled CityTime payroll project has abruptly halted operations and terminated its employees’ contracts amid a widening federal and city investigation, according to a company memo sent out late Tuesday night.

The top two executives of the company, TechnoDyne L.L.C., have also left the country and returned to their native India, according to people familiar with the case who were not authorized to speak publicly because the investigation was ongoing.

Whether the two executives — Reddy and Padma Allen, American citizens who are husband and wife — will return is unclear. While they are mentioned as unnamed co-conspirators in a federal complaint that was made public on Friday, neither they nor their company has been accused of wrongdoing.

The sudden demise of TechnoDyne — which, according to earlier company statements had 500 employees and $100 million in annual revenue — means that for the first time, the scandal has begun to have an adverse effect on a substantial number of people who may have been simply associated with a CityTime contractor, and not necessarily involved in the project.

Led by the United States attorney’s office in Manhattan and the city’s Department of Investigation, the authorities have accused several employees of CityTime contractors of defrauding the city in an $80 million scheme that began in 2005. But even before the accusations, CityTime, an automated payroll project, had become a liability for Mayor Michael R. Bloomberg because of its costs, which have climbed to about $700 million after an initial estimate of $63 million.

On Friday, investigators charged the project’s senior manager, Gerard Denault, with receiving over $5 million in kickbacks, as well as wire fraud conspiracy and money laundering. Mr. Denault urged his employer, Science Applications International Corporation, to hire TechnoDyne as the project’s main information technology subcontractor.

TechnoDyne received $464 million out of $628 million that was paid to Science Applications International and, according to the complaint, funneled $5.6 million to a sham consulting company, said to have been based in India and owned by Padma Allen’s mother, that Mr. Denault actually owned.

The complaint said that there was evidence that TechnoDyne tried to “conceal its interest” in the sham company, “and thereby its connections to the millions of dollars that were being paid to Denault.”

By Tuesday night, as TechnoDyne employees, concerned that the company’s Web site and switchboard were not working, began contacting reporters, the company had issued a memo.

Sent to The Times by an employee, and signed by its human resources department, the memo read, in part: “Due to legal action recently taken against TechnoDyne by a governmental authority, TechnoDyne is unable to continue normal operations,” and as a result, “is terminating the services of its employees and consultants,” effective immediately.

The company — which investigators said relied on Science Applications International for 80 percent of its revenue — pledged to cooperate with immigration lawyers to help workers who have H-1B visas or green cards. The company also said it would keep employees updated on compensation, health insurance and other issues.

Phone calls and e-mails placed to a spokeswoman for the company were not returned. Meanwhile, a visit early Wednesday to the company’s two addresses in Wayne — one in an office park, the other at a UPS store — did not reveal any activity or presence, other than the company’s name tacked onto a building directory. One person who works in the office park said that few people had shown up to TechnoDyne’s office in recent months.

TechnoDyne, which was founded in 1998, billed itself as an information technology consulting company that helped governments and private businesses with software development and cloud-computing management.

The company also enlisted prominent lobbyists in the city procurement process, including Gino P. Menchini, a former commissioner at the city’s Department of Information Technology and Telecommunications, and Agostino Cangemi, a former deputy commissioner at the same agency.

A spokeswoman for Mr. Menchini’s and Mr. Cangemi’s current company, National Strategies, said that the company never worked on CityTime, and that once the TechnoDyne allegations were known Friday, the contract between National Strategies and TechnoDyne was terminated immediately.

Padma Allen, who is also a medical doctor, had gained wider recognition of late. In December, Dr. Allen attended a White House briefing in on minority business issues. In 2010, she was named one of Ernst & Young’s entrepreneurs of the year in New Jersey.

Daily News columnist Juan Gonzalez wrote this morning:

As for Bloomberg, he keeps minimizing the worst scandal of his administration. He touts how the project - more than eight years late - will soon be completed.

Let's see what he says in a few more months.

Indeed, the chutzpah of the mayor to minimize the scandal that has seen hundreds of millions of dollars stolen from the city even as he touts his fiscal prudence in laying off thousands of teachers to save $300 million is, well, I'd like to say it's beyond belief.

But actually with Bloomberg, it just isn't.

It is, however, beyond the pale.

CityTime Kickbacks

The NY Post details more criminal activity in the CityTime case and looks more and more damaging to Bloomberg:

The firm hired to do oversight on The firm hired to do oversig embattled CityTime project -- in which four consultants have been charged with embezzling $80 million of taxpayer funds -- inked a suspicious deal with a subcontractor that included a 20 percent "kickback" for its own coffers, officials said.

Amazingly, the city allowed the oversight consultant firm, Spherion, to select its own watchdog, The Post has learned.

And the city's Office of Payroll Administration -- whose executive director Joel Bondy was suspended without pay last week as part of the mushrooming CityTime scandal -- signed off on the deal that brought in an extra $22,000 for Spherion, according to a July 2005 letter obtained by The Post.

"We can now add kickbacks to the list of criminal offenses that appear to have been commonplace in connection to IT contracts within OPA, despite numerous warnings," said Councilwoman Letitia James (D-Brooklyn), an early critic of major cost overruns in the CityTime project.

Spherion was in charge of "the day-to-day quality-assurance coordinator" for the project, according to one city official.

It in turn selected Gartner, a consultant firm, to do an overview of the $722 million project.

Although both did oversight, the city official insisted they did separate jobs with Gartner providing "more of an overview assessment."

Part of Gartner's role was to make sure that Spherion was doing a good job, a source close to the investigation said. A City Hall source, however, disputes that claim.

In the $132,000 contract -- approved by the OPA -- Spherion got 20 percent of Gartner's fee.

"The contract agreement that Spherion is in the course of establishing with Gartner . . . will be inclusive of any travel-related expenses incurred by Gartner. Spherion will mark up the Gartner fixed price by 20 percent to reflect administrative-overhead costs," according to the letter now-suspended OPA head Bondy wrote to Spherion five years ago.

Four consultants working on the long-overdue project -- the cost of which jumped from $63 million in 1998 to an estimated $722 million -- were arrested last week and charged with stealing more than $80 million.

Cheryl Hilpert, a spokeswoman for Spherion, defended the company, but declined to comment on specific questions about the kickback.

"[Spherion] has been cooperating with the US attorney's investigation regarding the alleged fraud within New York City's Office of Payroll Administration's CityTime program, and intends to continue doing so," she said.

"To date, we have no reason to believe that [Spherion] is itself a target of the investigation and will make any additional comments as appropriate," she said.

Both the city and state comptrollers continue to probe contracts involving firms with a role in CityTime.

The last sentence is quite damning for Bloomberg.

The more investigators look into the CityTime mess, the more criminal activity they find.

How much do you want to bet that the more they look into other city business done by these same companies, the more crookery they find as well?

Bloomberg thinks he's running for president in 2012.

But CityTime is going to be one helluva of an albatross.

CityTime Company Tried To Buy Off Critic Of Program

In the old days, they used to call this thing "bribery":

What to do when you're a private computer consultant whose project for the city is excruciatingly over-budget and falling way behind?
Hey -- how about this? Offer the city supervisor a job!

That's the approach taken by officials of the Virginia-based defense contracting company, Science Applications International Corp., who are running the now deeply scandal-scarred CityTime payroll computerization project, according to Juan Gonzalez's latest blast in today's News.

The offer was allegedly made in January, 2002, to Richard Valcich, ex-director of the office Payroll Administration, who was then overseeing the bungled project that has since soared from $63 million to a more than $600 million cost for taxpayers.

Valcich apparently blew a gasket when an SAIC official made the job pitch in a meeting. He then wrote a polite but stern follow-up letter spelling out in writing that it is a violation of every rule in the book to offer post-city employment to a city official overseeing your work.

In the letter, Valcich apologized "if I seemed rude and abruptly shortened your discussion on a future post city-employment position with SAIC." He added: "[I]t is inappropriate to discuss any post employment with a company that I do business [with]... "[I am] flattered you would consider me for such a position with SAIC but there are restrictions due to the city's conflicts of interest rules."

The letter is the latest nugget to emerge from city Comptroller John Liu's highly critical September audit of the deeply-tangled CityTime project which was intended to simplify city worker time-cards and payroll. Last week, the feds busted four consultants accused of milking the effort of $80 million through their own bogus timecards and shell corporations. One of those arrested, Mark Mazer, had "special access" -- it's the feds' term, not ours -- to Joel Bondy, the Office of Payroll Administration director who succeeded Valcich who retired in 2004.

Liu's audit also surfaced another Valcich-to-SAIC letter written a year after he turned down the job pitch and reported in Tuesday's News and Times. In that February, 2003 letter, Valcich accused the firm of deliberately obstructing progress.

In the Bloomberg administration, they call this "networking."

Kudos to Valcich for turning SAIC down.

I wonder just what kind of bribes SAIC has thrown at people in the DOE?