Trenton, NJ (April 21, 2005) - The New Jersey Schools Construction Corporation (SCC) has reviewed Inspector General Mary Jane Cooper's preliminary report today, and will work with the Governor's Authorities Unit and the SCC Board to implement her recommendations, as well as others, to improve efficiency and accountability at the agency.

"Our agency is just two-and-a-half-years young. In this short timeframe, we're fulfilling the Supreme Court's mandate and have successfully built dozens of new schools that are benefiting thousands of children throughout the State. But, like any new start-up organization, there are always growing pains-lessons to be learned and procedures that can be done better," said Chief Executive Officer John F. Spencer.

"Over the past month, Inspector General Mary Jane Cooper and her staff have been reviewing the SCC's procedures to determine if there are ways we can operate more efficiently. We welcome her recommendations and are currently identifying ways we can implement them-as well as others we've developed independently-either immediately or as soon as possible. The SCC is prepared to take whatever steps necessary to implement additional internal and external controls to ensure that every dollar is being spent appropriately," said Spencer.

While the SCC is still thoroughly reviewing each of the IG's recommendations, the following are steps that the SCC has taken, or will take either immediately or as soon as possible:

1. SCC Internal Management and Financial Controls: The SCC is already in the process of re-structuring its organization to create a Finance Office that will report directly to senior management.

2. Contract Approval Procedures: The SCC will immediately require more than one signature for the approval of contracts.

3. Employee Bonuses: The SCC eliminated the use of merit-based bonuses in 2004. Employees were not given bonuses for the 2004 work year. Any salary increases are consistent with the standard salary structure that exists for all public state employees.

4. SCC Regional Offices: A cost-benefit analysis is currently underway to determine if the three northern regional offices can be consolidated.

5. Outside Employment Contracts: In the past, any outside employment contracts have had the full review and approval by the Board. The SCC is evaluating discontinuing the use of outside employment contracts and determining if there is a cost savings to hire permanent SCC staff to do the work.

6. SCC Board of Directors and Board Memos: According to the Executive Order that established the SCC, it is the responsibility of the Governor to appoint members to the Board.

Regarding the Board memos, it is the SCC's standard policy to provide Board memos one week in advance. To the greatest extent possible, the SCC will limit the number of "walk-on" items, or last minute items for approval, to extreme situations.

7. Disbursement Recovery and Change Order Policy: In regards to change orders, the SCC has already created a Change Order Review Unit that is reviewing change order policies and procedures.

Regarding the recommendation to recover money that was dispersed due to design errors or omissions, the SCC will review this recommendation with the Attorney General's Office to determine whether it is possible.

8. Ownership of Architectural Designs: Whether or not the SCC can become the owner of an architectural design and re-use those designs will be discussed with the Attorney General's Office. If appropriate, the contracts will be modified.

9. Project Management Firms: Initially, PMF firms were retained because experienced project managers were needed on board immediately. There was a mandate from the Supreme Court and the School Facilities Act to build schools, yet, there was no staff. Therefore, the PMF was hired to get the program up and running.

The SCC has already been working to reduce the role of the PMF on projects by utilizing SCC staff and construction management firms.

10. Land Acquisition: Since the start of the IG's review, the SCC has suspended any land acquisition to the extent possible.

To minimize overall project costs, the SCC is developing standardized classroom designs, which would set limits to what can be included in a classroom, and anything beyond those limits would be the districts' responsibility.

Last year, to address the growing concern about the cost of acquiring land, the SCC created a Land Acquisition Task Force-that includes SCC Board members-to help tackle some of the challenges in the acquisition and relocation processes. One of the recommendations of the Task Force was to have the SCC take an earlier and more proactive role in selecting the site with the district and the municipality to help identify sites that are less expensive.