New Jersey does not do a good job overseeing the independent contractors that it hires, according to a new Rutgers University study titled, “Overlooking Oversight: A Lack of Oversight in the Garden State is Placing New Jersey Residents and Assets at Risk.”

Homes damaged by Superstorm Sandy in Point Pleasant (Dennis Malloy, Townsquare Media NJ)

The report concludes that the problem has existed for more than a decade under governors from both political parties and it predates the Christie Administration. Oversight questions are in the spotlight now because many New Jerseyans are still trying to recover from Superstorm Sandy.

“Lack of oversight in the state’s Sandy rebuilding and recovery program led to the inappropriate denial of aid to thousands of families and businesses,” said Janice Fine, a professor at the Rutgers School of Management and Labor Relations and a co-author of the report. “Largely what we have in New Jersey is oversight by audit and expose which only catches problems after they arise and in many cases only once they have become quite severe.”

The study blames the oversight problems on a lack of experienced state contract managers and the overloading of those who remain. That is the case with the lack of oversight for the myriad contractors working on a variety of issues not solely Sandy recovery and rebuilding, according to the report.

“There does not appear to be any agency within the state with the capacity or competence to monitor the overall efficiency or effectiveness of resources allocated to contractors,” said Patrice Mareschal, a professor at the Rutgers Department of Public Policy and Administration and a co-author of the study. “Our review of contractor oversight in New Jersey shows that the state is failing in its duty to protect vulnerable citizens from poor service and taxpayers from wasted funds.”

Among other things, the study recommended finding sufficient financial resources to improve oversight of contractors, a ban on the outsourcing of oversight, a reliable system of cost analysis and making the contract bidding process more transparent.

The study also examined the situation surrounding Hammerman and Gainer, Inc., the independent contractor hired by the Christie Administration to administer two programs doling out almost $800 million in federal aid to Sandy victims. HGI has been fired by the state.

“When they actually reviewed rejections they found that approximately 80 percent of the time when HGI rejected people they were wrong," said Adam Gordon, a staff attorney at the Fair Share Housing Center. “I think this is a cautionary tale of what happens in an absolutely critical disaster recovery situation when there’s an outside contractor hired and there’s really no oversight.”

The Christie Administration did not directly address the Rutgers report, but did point to a US Homeland Security Office of the Inspector General audit that stated the Christie Administration acted completely appropriately in awarding contracts to Ashbritt for debris removal after Sandy. The OIG report said the contract provided an extremely cost-effective option for towns from a proven, experienced company who got the job done while ensuring Federal Emergency Management Agency reimbursement.