PROVIDENCE, R.I. (WPRI) ─ The now-canceled contract between the state and a New York-based consulting firm was supposedly going to be paid for with a portion of Rhode Island’s federal COVID-19 funding, lawmakers on the R.I. House Oversight Committee learned Thursday evening.
Tim DelGiudice, the head of the Council on Postsecondary Education, broke down what led to their decision to hire Alvarez & Marsal to examine the financial challenges of Rhode Island College (RIC). Last year, RIC President Dr. Frank Sanchez said the college was facing its worst fiscal crisis in its 166-year history.
In December, a no-bid, $76,000-a-week contract was awarded to the firm, but was pulled following blowback from local lawmakers.
DelGiudice defended the council’s decision to hire the firm, adding that he was advised by top state officials that Alvarez & Marsal was the best suited for the job.
“Everyone was in agreement that I meet with A and M, and if they are able to take on the added scope to support RIC, we could get them working quickly because they are already working in Rhode Island and already have existing state contracts,” DelGiudice told lawmakers Thursday, referring to a previous conversation he’d had with members of the Raimondo administration.
Alvarez & Marsal was tasked with examining things like the school’s operations, enrollment and COVID-19 response in an effort to come up with recommendations to improve the college’s finances. Those recommendations were then going to be sent to then-Gov. Gina Raimondo for her to consider in her budget proposal.
But when Raimondo was tapped to join President Joe Biden’s administration as commerce secretary, the state’s budget became unclear. That’s when DelGiudice said he canceled the contract, adding that Raimondo’s priorities differed from those of now-Gov. Dan McKee.
“He’s got other things on his mind, and for me, as a volunteer running in to say, ‘Hey, I’m spending all of this money to get this great report that I have great confidence in, but now I need confidence that you are going to act on it the way Governor Raimondo had committed to act on it,'” DelGiudice said. “That’s where I lost confidence.”
But even with his explanation, lawmakers weren’t impressed.
Rep. Julie Casimiro, a North Kingstown Democrat, was especially rattled after learning state-level officials planned to use federal COVID-19 relief funding to pay for it.
“So during a pandemic, when people are facing food insecurity, paying their bills and not knowing where the money is coming from and not paying their rent, and landlords are not getting paid … you’re spending $76,000 per week?” Casimiro questioned.
At the time, DelGiudice said he was told the state would figure out how to pay for the contract by since RIC couldn’t pay for it.
“I made it very clear … that RIC had no money to pay for this. It wasn’t in their budget,” DelGiudice explained. “I was assured we were going to find other resources. At that point, I did not know it was part of the federal CARES Act money, specifically the Governor’s Emergency Education Relief funds.”
Rep. Anastasia Williams, a Providence Democrat, said it appeared the institution already knew where their financial troubles were, yet still hired an outside firm to do the work. She said it was hard for her to fully believe DelGiudice’s explanation.
“It’s nothing more than a sham scam … with all of those individuals being given the hook up from the floor up for the individuals that you are all associated with, and the heck with the taxpayers of Rhode Island,” Williams said. “From my point of view, it is what it is.”
Sanchez made it very clear that the college did not initiate the contract, though he did sign off on it.
“I know at Rhode Island College we certainly did not ask, we didn’t request, we didn’t seek engagement with A and M,” Sanchez said.