University of Nevada, Reno audit shows violations

Nevada's state university system violated laws and policies but wasn't involved in any outright fraud with no-bid contracts for energy-saving campus projects that cost millions of dollars, a legislative audit showed Thursday.

Auditors told a legislative subcommittee that 14 no-bid contracts for $8.2 million worth of energy retrofit projects at the University of Nevada, Reno led to bid-rigging allegations, but those claims weren't supported by evidence amassed in an extensive review.

However, the audit states the projects didn't comply with state laws and university regent policies requiring competitive bidding - and energy savings from several projects didn't meet expectations or couldn't be verified.

UNR contracted with Sierra Pacific Power Co., which got subcontractors to do the work. In all but two cases, the jobs went to Reno-based Gardner Engineering Inc., headed by Jim Gardner who formerly worked at UNR and has maintained close ties with the school.

The retrofit program that began in 1992 was stopped in 2000, and since then UNR did two more retrofit programs on a bid basis for about $6 million. But auditors said there was no evidence that the projects were properly evaluated to determine whether costs were reasonable.

Auditors also said the University of Nevada, Las Vegas, conducted several retrofit projects since 2000, and competitive bidding laws weren't followed in most of those cases either.

The report also said there were "significant" cost overruns on UNR's Carlin Fire Science Academy project and UNLV's Thomas and Mack Center renovation, partly because the university system's facilities management staffers weren't involved enough in those jobs. The deficit at the fire academy alone is $10.7 million.

Also, auditors said an analysis of UNR and UNLV retrofit projects showed that only a few could document that they followed requirements to pay prevailing wages to workers on those jobs.

Ron Zurek, vice president of finance and administration at UNR, and Buster Neel, vice chancellor for finance and administration for the University and Community College System of Nevada, told lawmakers they agreed with the auditors' recommendations to fix the problems.

Asked to comment after the audit report was presented, Zurek said he didn't want to go beyond what was presented to the lawmakers' audit subcommittee.

The audit stemmed in part from complaints about bid-rigging from Greg Macrenaris, who did several small solar-screening projects at UNR but lost a larger contract several years ago. Macrenaris raised numerous questions about Gardner Engineering, but Gardner denied his firm was involved in any wrongdoing and called Macrenaris' claims "sour grapes."

Macrenaris said he was pleased with the audit findings, adding that the state attorney general's office "absolutely" should review the case. "Look at all these laws that have been broken," he said.

Macrenaris said he had asked the governor's and attorney general's offices previously to investigate but nothing happened.

He urged state lawmakers to follow up with an investigation of their own - and audit subcommittee members said they have a lot of questions they want answered.