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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Santa Cruz County Grand Jury
• 2010-2011
Pajaro Valley Unified School District Insurance Vendor Selection: Are There Options?
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 6 findings
F1
Page 62
The Grand Jury found no evidence of any conflict of interest between PVUSD insurance related vendors and PVUSD employees or trustees.
F2
Page 62
It appears that the PVUSD Board of Trustees has relied heavily on the administration for information and recommendations on vendor selection and contract approval.
F3
Page 62
During the initial interviews, PVUSD Board of Trustees and administrators appeared to be unaware of ongoing litigation concerning Keenan & Associates.
F4
Page 62
The services that Keenan & Associates provide PVUSD go beyond an advisory and consultative capacity for health benefits to also include brokering a wide variety of insurance, prescription management, early retirement planning and administration of several JPA’s.
F5
Page 62
Even though PVUSD requested proposals from five qualified vendors for Medical, Dental and Vision Consulting Services, and followed California Code and district purchasing policies, the process does not appear to encourage multiple bids.
F6
Page 62
The Medical, Dental and Vision Consulting Services contract discloses that Keenan & Associates receives direct compensation from PVUSD and indirect compensation from brokered vendors, which is a conflict in that it diminishes the incentive for Keenan & Associates to always recommend vendors offering PVUSD the best deals.
Recommendations 4
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R1Page 62PVUSD Board of Trustees should act more independently of the administration when reviewing and approving significant contracts and vendors.
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R2Page 62PVUSD should include in their purchasing process an Internet background check on prospective vendors, relating to litigation or other issues.
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R3Page 62PVUSD should review their purchasing process and identify possible changes that would increase the number of qualified bids.
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R4Page 62PVUSD should consider the nature of the issues raised in the Fourth Amended Class Action Complaint to determine if they apply to their district. Following that, they should exercise clause 4-D in the Medical, Dental and Vision Consulting Services contract, to review both total direct and indirect compensation received by Keenan & Associates and the potential impact to PVUSD’s overall costs. Pajaro Valley Unified School District Insurance Vendor Selection ∫ 59