Last month, the state executed a contract with Protiviti Governmental Services, a Virginia-based subsidiary of management consulting Robert Half. Kimberly Kennison, executive finance manager of the state Office of Policy and Management, said at a Sept. 14 MARB meeting that there had already been a “kick-off meeting” to introduce Protiviti officials to stakeholders and begin their work.
“I’m very excited about this, and also being able to help the city move forward and address those items that need immediate attention,” she said.
West Haven was placed under Tier III of the MARB’s four-tiered system in 2017 following the issuance of deficit bonds and remained there until May 2022, when Gov. Ned Lamont escalated the city to Tier IV. Under Tier IV, the MARB has approval authority over all bond ordinances, budget transfers, contracts greater than $50,000 and has the right to appoint a finance manager to work within City Hall to implement the board’s advice and mandates.
Throughout its time under MARB oversight, West Haven leadership has been criticized for its lacking financial controls. Although the city has eliminated its recurring budget deficits, initially aided by supplemental state funding by the MARB, the theft of $1.2 million from the city by former state Rep. Michael DiMassa and a forensic audit of the city’s management of federal pandemic funding exposed pervasive deficiencies in financial management.
Earlier this year, some impatient MARB members began to call for a state takeover of the city; OPM Secretary Jeffrey Beckham urged the members to allow the state to first work through all of the remedies available through the MARB by statute before raising that possibility.
A financial analysis of West Haven commissioned by the MARB to act as a road map for Protiviti has yet to be made public, due to what MARB officials classify as information contained in the report that could make West Haven vulnerable to attack should it be released.
According to the state’s contract with Protiviti, obtained by the Register, the financial management firm will be paid for work performed up to $1.4 million. A spokesman for OPM said the $1.4 million will be paid through state funds initially paid to West Haven, but are now used to reimburse the state for Tier IV-related expenses.
The names and hourly rates of eight positions, five of which already are filled, are redacted from the copy of the contract provided to the Register, although the contract notes that a quality managing director will provide services at no charge to OPM. The contract extends through March 31, 2025.
“In addition to monitoring city activities and operations for compliance with Tier IV requirements, the financial manager is expected to carry out certain MARB powers to be delegated by the board, to ensure the implementation of measures designed to improve or correct financial operations and to monitor the city’s adoption of those measures,” the contract reads in its description of Protiviti’s scope of work.
“The MARB has engaged a financial organizational assessment consultant to conduct a comprehensive evaluation of financial operations in the city,” it reads. “That consultant’s initial report will include recommended improvements and corrections to the city’s financial operations. The financial manager will provide advisory and project management support to the implementation of those recommendations and monitor the city’s progress in adopting recommended measures.”
The contract outlines two main tasks for the firm: supporting the MARB in its oversight of the city by serving as a representative and liaison to the city; and providing the city with project management support and coaching.
According to the contract, the MARB makes all decisions and Protiviti’s role is “limited to advice and project management support.”
Protiviti’s role as financial management firm is not the first time the MARB has embedded a liaison in West Haven; the board once contracted Michael Milone, a former town manager of Cheshire and controller of New Haven, to do project management services in the city. Mayor Nancy Rossi said Milone was helpful in executing an interlocal agreement between the city’s three fire districts, which led to the streamlining of some financial services, and restructuring the city’s conveyance tax.
A spokesman for OPM said Monday that the contract with Milone predates the city’s escalation to Tier IV, and the Protiviti contract will ensure that recommendations identified in the financial analysis are implemented and reported to the MARB.
Although the installation of a financial management firm is the first time OPM is placing a liaison in West Haven City Hall since the city was escalated to Tier IV, it is unclear what legal authority the state has to mandate that the city complies.
In the past, Beckham has said he would be interested in having the General Assembly revisit the statute to give the state oversight board more leverage and levers. According to an agenda for the MARB’s West Haven subcommittee scheduled for Tuesday, the city has 18 open items, including some that were added to the list months ago. In March, subcommittee members posed multiple questions about issues highlighted by the April 1, 2022, forensic audit report about expenditures that were identified as questionable, such as bonuses issued to contractors and overtime funds provided to the fire departments despite those departments having their own budgets with overtime line items.
Rossi did not immediately respond to a request for comment Monday. As Rossi is not seeking reelection in November, it is likely her successor will be the one collaborating most closely with Protiviti.
Barry Lee Cohen, the Republican nominee for mayor, said in an emailed statement that Protiviti’s expertise “is welcome and sorely needed” due to past fiscal mismanagement.
“My administration will provide the financial manager leadership with no excuses and without delay as has been the status quo of the Rossi administration,” he said. “The sooner we show good faith and comply with the MARB mandates, the better.”
Cohen also took aim at his Democratic opponent for the mayor’s seat in November, state Rep. Dorinda Borer, deputy speaker of the House and a former member of the Appropriations Committee, for sitting “on the sidelines” instead of mediating between the city and the MARB.
“Robert Half has a strong reputation and I think it’s great we will have that financial support on the ground,” Borer said in an emailed comment. “It’s my goal however if elected to build trust and confidence amongst MARB through my constructive collaborative actions and demonstrate that we have the ability to manage our own City. We should be able to do that long before 2025.”
Borer responded to Cohen’s accusation by saying the state delegation voted to fund the OPM line item and “continually met with both local and state leaders to see how we can assist with West Haven’s situation.” She said that had Cohen not been part of the City Council majority that had authorized DiMassa to manage the federal Coronavirus Relief Fund grant with little oversight, “I wouldn’t have to always be the mop up crew.”
Cohen said in an emailed response that Borer “needs a new, clean mop” and that her response to accusations of sitting on the sidelines was “the same party politics pointing fingers and conducting blame games.”
“Nobody on the council which included the majority of eleven Democrats had a crystal ball in December 2020 that the administration would have NO vendor approval procedure, something that she was in the position to address with the current administration,” he said. “She was missing in action.”
Steven Mullins, a Republican who has announced an intention to run a write-in campaign in November’s election, said in a text message he believes the city “should be eager” to work with a financial manager. He commended the city’s acting finance director for his “commendable job,” but said the city needs more help “to get us back on track.”
A representative with Robert Half did not immediately respond to a request for comment Monday.