Taxpayers paid for baby gift, other questionable expenses as part of Cannon building renovation
Project now estimated at $182 million over budget
Taxpayers were billed for a baby gift, flowers and even business cards by the companies working on the ongoing and over-budget renovation of the Cannon House Office Building, an audit found.
While promising steps to prevent it from happening again, the agency that paid the bills said the audit demonstrated "outstanding fiscal management" because unallowable expenses were less than 1 percent of the total cost.
The review by the inspector general for the Architect of the Capitol questioned $93,764 spent for unallowable and dubious purposes as part of a project, which is $182 million over budget.
The Architect of the Capitol “repetitively reimbursed small-dollar amounts of unallowable costs” to the joint venture overseeing the Cannon project, which is made up of Clark Construction Group and the Christman Co., the inspector general found in a report made public March 24.
The report identified 154 reimbursements totaling $38,529 in unallowable costs. The Architect of the Capitol reimbursed the joint venture for: $1,118 in unrelated legal costs; $1,255 for “unallowable immigration costs"; $70 for florist costs; $4,427 for local travel; $4,088 for coffee-making supplies and equipment; $1,205 for business cards; and $678 on background checks.
There were also five unallowable expenditures totaling $18,170 for legal costs related to testimony before the panel that oversees the project, the House Administration Committee.
“We applaud the IG’s finding that less than 1% of the total project budget was identified as unallowable over a four and a half year period of construction work. The Architect of the Capitol strives for this number to be zero, so will continue to address any identified issues and has already taken immediate action to prevent any similar outcomes in the future," Christine Leonard, a spokesperson for the Architect of the Capitol, said in a statement.
"Bottom line, the Inspector General’s report confirms AOC’s outstanding fiscal management of the Cannon House Office Building Renewal Project since total unallowable costs identified in the report were well below thresholds suggested by the Government Accountability Office and Council of the Inspectors General on Integrity and Efficiency," she added.
But in August, House Administration Committee members were not pleased when they were made aware that the Architect reimbursed Clark Construction Group $234,383 for legal fees to prepare for a hearing before that panel.
The “Cannon Renewal Project” started in 2014 and was initially expected to cost $752.7 million over approximately 10 years. It is now projected to cost $934.8 million, according to a fiscal 2022 explanatory statement from appropriators.
A batch of 204 reimbursements totaling $48,100 were questioned by the inspector general. Included in these costs is $135 for a baby gift; $104 for a bike wheel; $3,110 in unexplained credit card charges; and $8,017 in meal and amusement expenses.
A separate amount of $7,135 in punch list reimbursements was also questioned.
“We acknowledge identifying a small-dollar amount of unallowable and questioned costs based on the total amount of reimbursable costs; however, the number of occurrences of generally unallowable costs caused concern,” Christopher Failla, the inspector general, wrote in a memorandum to Architect of the Capitol J. Brett Blanton.
Failla recommended recovering the $38,529 in unallowable costs, which Blanton said his agency has done in a March 21 letter to the IG.
Another inspector general recommendation was to review the $55,235 in questioned costs and recover any the construction manager can't provide support for. Blanton said he will review the questioned costs "recognizing that a great deal of these costs are associated with closed contracts."
The inspector general also recommends that the agency reevaluate its approach to bolster the review and internal control process for small-dollar reimbursements to avoid approving impermissible charges. Blanton responded to Failla that his agency has reduced the threshold for requiring documentation from $25,000 to $10,000 and will continue to review bills for legal and consulting costs. Additionally, he said they will review a random sample of 10 construction manager transactions under $10,000 on a monthly basis.
Neither company responded to requests for comment.