The Public Eye

Audit raises questions on legal bills for Twin Rivers Unified

Published: Friday, Feb. 8, 2013 - 12:00 am | Page 1B
Last Modified: Sunday, Feb. 10, 2013 - 2:00 pm

An audit commissioned by the Twin Rivers Unified School District into its former law firm has unearthed a number of questionable billing practices that have proved costly to the district, according to a copy of the audit that has been obtained by The Bee.

Timothy M. Cary & Associates of Cameron Park submitted bills that were inappropriately vague, charged $225 an hour for a attorney who was not authorized to work in California and – to Twin Rivers' detriment – used relatively inexperienced lawyers for more than a third of services performed for the district, according to an audit by KPC Legal Audit Services Inc. of Glendale.

The audit has been largely kept under wraps while district trustees discuss in closed session what their next steps will be. Trustee Rebecca Sandoval said the board has "come up with a plan to address the findings in the audit, but the plan is confidential" because it hasn't been reported in public session.

It is unclear whether the audit will be made public.

Through a media relations specialist, Cary declined to comment for this story. Spokesman John Segale said Cary, a longtime school board member for the El Dorado Union High School District, had not seen the audit.

Cary's firm has been under scrutiny for two years as the Twin Rivers teachers union has drawn attention to mounting legal bills in the district. Between 2007 and 2012, Twin Rivers paid Cary's firm more than $10 million.

In the past year alone, Twin Rivers trustees approved $3.2 million in payments, a Bee review of school board documents found.

Teachers union President John Ennis said he was appalled by the audit results.

"We don't have enough custodians and are pinching pennies and shortchanging kids, but we have a $10 million law firm?" Ennis said.

KPC reviewed 15 percent of legal billings by Cary's firm from June 2011 to July 2012.

Andre Jardini, president of KPC, said reviewing 15 percent is a representative and reasonable sample.

"Things like billing approaches and styles aren't likely to have changed much," Jardini said Thursday. "If there is a set of issues in one part of invoices, those likely are present in the remaining invoices."

KPC's report states that 34 different people submitted hours for payments on Cary's billings, including attorneys, law clerks, IT specialists and document clerks. Their rates ranged from $80 to $225 an hour.

KPC identified one attorney – Andrew Briggs – as having billed the school district at a rate of $225 an hour, a practice the auditing firm said was improper since Briggs is not an admitted attorney in California.

Loni Chhen was identified as an associate attorney on Cary's firm's website, but billed the district as a senior associate attorney. The rate is a difference of $20 an hour. Chhen, who was admitted to the state bar in 2001, billed the district for 1,400 hours during the one year of billings reviewed by KPC.

The auditing firm also found that more than 3,000 hours of billings were logged by associate attorneys, most of whom were newly admitted to the bar.

"Therefore, more than 1/3 of the services rendered by the firm were rendered by relatively inexperienced associate attorneys," according to the audit. "Because of the flatness of the rate curve across the firm's personnel, a very significant profit to the firm could be expected by having such a large proportion of the work done at this lower, but relatively highly compensated, tier."

Auditors found the frequent use of multiple attorneys working on the same tasks drove up the cost of representation. As an example, KPC cites the use of four attorneys charging an hour each for a conference call with Associate Superintendent Patty Smart regarding layoff issues.

Auditors also raised the issue of vague billings, citing many cases in which bills sent to the district had few details other than "review and analyze legal issues re same."

KPC said Cary's firm billed the district $210,000 for interoffice communications among attorneys, $16,700 for photocopying and $7,835 for storage charges.

On several occasions, attorneys billed the district for more than eight hours per day, including Cary and Paul Hamill, who each charged 13 hours for work performed on April 19 regarding an investigation into the district's police force.

Other issues identified in the audit included more than $71,000 billed for noncompensable overhead expenses and many instances of block billing, which lump multiple tasks on a single date, making it unclear how much time was spent on each task.

Twin Rivers trustees voted 4-3 in November to hire KPC to perform the audit for $25,000. At the time, trustees said they would wait for this audit to decide whether to pay more than $200,000 for a full forensic audit.

Trustees Bob Bastian, John Dexter, Walter Garcia Kawamoto and Cortez Quinn voted in favor of the audit, while Linda Fowler, Michael Baker and Sandoval voted against it.

After reviewing the audit, Sandoval said she now would have voted differently. Baker said, "Knowing what we know now, I would think we need to look into it further."

"I'm taking it seriously," Bastian said. "I think the board has to react to it and make adjustments. Many of the findings are significant."

Quinn, the school board president, and Twin Rivers interim Superintendent Joseph Williams could not be reached for comment.

Billings by Cary's firm became a lightning-rod issue in the June school board election, during which four new trustees were elected. Trustee Dexter said he has pushed for what he promised voters in the June election – a review of legal fees.

"For six months this sat on the shelf because no one wanted to pursue this," Dexter said. "I continued to push this thing since we were elected to get this done. There is vindication that something was going on."

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Read more articles by Melody Gutierrez

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