By DONNA JONES
Posted: 06/29/2011 07:56:26 PM PDT
Updated: 06/29/2011 07:58:45 PM PDT
WATSONVILLE - A grand jury report critical of Pajaro Valley Unified's procedures for contracting for insurance services is meeting with little disagreement from the district's top business official.
The 2011 Santa Cruz County Grand Jury report, released today, says the school district needs to take a closer look at its vendor and do more to increase competition for the contract.
"We took this pretty seriously right from the get-go," said Chief Business Officer Brett McFadden. "From my standpoint, they did me a favor. It helped me look at some of our internal processes. We're following the law, adhering to federal and state procurement policies, but we could be more transparent and proactive in getting competitive bids."
The jury said Pajaro Valley relies on one contractor, Keenan & Associates, to provide a wide range of insurance services, including acting as a consultant, a broker and an administrator of insurance pools.
In one instance related to a medical, dental and vision consulting services the grand jury found Keenan receives compensation from both the district and brokers, creating a conflict because "it diminishes the incentive for Keenan & Associates to always recommend vendors offering PVUSD the best deal."
The jury also notes an ongoing, 7-year-old class action lawsuit filed by public school districts and community colleges against Keenan and other insurance brokers alleging kick-backs, bid-rigging and anti-competitive practices. Though jury acknowledges the allegations have never been proven, the panel recommends Pajaro Valley officials look into the issues raised in the lawsuit to determine if any apply to the district.
Since its inquiry, the district has posted more detailed vendor information on its website, the jury said.
McFadden said he's looking to provide even more information online and reaching out to vendors to increase bidders. Keenan was the only vendor to bid on the insurance contract in 2009.
http://www.mercurynews.com/breaking-news/ci_18380184
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