SCHOOLS DEVELOPMENT AUTHORITY, PART II - State

State of New Jersey Commission of Investigation

SCHOOLS DEVELOPMENT AUTHORITY, PART II

Restoring Accountability, Integrity and Oversight to the Management of New Jersey's School Construction Program

June 2021

State of New Jersey Commission of Investigation

SCHOOLS DEVELOPMENT AUTHORITY, PART II

Restoring Accountability, Integrity and Oversight to the Management of New Jersey's School Construction Program

SCI 50 West State St.

P.O. Box 045 Trenton, N.J. 08625-0045 609.292.6767 state.nj.us/sci

Joseph F. Scancarella

Chair

Robert J. Burzichelli Rosemary Iannacone

Kevin R. Reina

Commissioners

State of New Jersey

COMMISSION OF INVESTIGATION 50 WEST STATE STREET PO Box - 045

TRENTON, NEW JERSEY 08625-0045 Telephone (609) 292-6767 Fax (609) 633-7366

June 2021

Chadd W. Lackey

Executive Director

Governor Phil Murphy The President and Members of the Senate The Speaker and Members of the General Assembly

The State Commission of Investigation, pursuant to N.J.S.A. 52:9M-1 to -20, herewith formally submits the final report of findings and recommendations of its investigation into the construction oversight and administrative operations of the New Jersey Schools Development Authority.

Respectfully,

Joseph F. Scancarella Chair

Robert J. Burzichelli Commissioner

Kevin R. Reina Commissioner

Rosemary Iannacone Commissioner

New Jersey Is An Equal Opportunity Employer ~ Printed on Recyclable Paper

TABLE OF CONTENTS

Executive Summary .........................................................1 Background .............................................................5 Construction Oversight ............................................7 Construction Deficiencies........................................11 Real Estate Losses ...................................................21

Referrals and Recommendations ..................................27 Appendix ..................................................................... A-1

Executive Summary

The New Jersey Schools Development Authority (SDA) is entrusted with upholding a noble mission: ensuring that students in the state's poorest districts have access to school facilities that are educationally adequate, safe and on par with those available to their peers in higher-income communities. To date, it has built or upgraded more than 850 schools and provided new classroom spaces for more than 70,000 students in districts across all of the state's 21 counties.

The obligation to carry out that mission is constitutionally mandated, and more than 20 years since the creation of New Jersey's School Construction Program, its necessity has not diminished. Recent estimates indicate 18,000 new seats are needed to replace outdated, overcrowded and, in some cases, crumbling schools in low-income districts where many schools are more than 90 years old.

Yet, throughout its two-decade existence as a steward of public monies designated to providing educational opportunities for the neediest school children in the state, the standalone government entity ? known first as the Schools Construction Corporation (SCC) and later the SDA ? has been plagued by spotty and inconsistent top professional construction leadership and management. Over that time, during both Democratic and Republican administrations, it has had nine different Chief Executive Officers, with only three having professional construction or engineering experience.

As a result, throughout its existence, both the SDA and its predecessor have lacked consistent organizational leadership and meaningful oversight to provide a system of checks and

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