SCHERERVILLE | McDonough Associates Inc. has been suspended as the town's engineering firm, according town officials.
The Town Council will make a final determination about McDonough Associates' status as the town engineer at Wednesday's council meeting.
The town's action follows a three-year suspension the Illinois Department of Transportation issued to McDonough Associates.
An IDOT review of McDonough Associates' records from Dec. 31, 2000, to Dec. 31, 2009, produced multiple findings, including an accusation that several of McDonough's expenses that should have been charged to "direct labor" were charged to overhead accounts.
The action caused IDOT to pay more than necessary to McDonough because of an inflated overhead rate, according to IDOT records.
A hearing about the accusations was held in April, and a hearing officer determined the overhead account situation warranted suspension, but there wasn't adequate evidence to prove four other allegations, IDOT records state.
The hearing officer recommended a six-month suspension, noting a longer suspension could result in the bankruptcy of McDonough, according to IDOT records.
Bill Grunloh, IDOT's chief procurement officer, did not agree with the recommendation and issued a three-year suspension, he said in a final determination of suspension report issued Tuesday.
Although McDonough has a long history with IDOT, "the audit showed that for the majority of the last decade (McDonough) has been overbilling," his report states.
Schererville Council President Tom Schmitt said the situation with McDonough has been ongoing the entire year, and town was waiting on a ruling from IDOT before making a decision about the engineering firm.
"We have to move on," Schmitt said.
Councilman Jerry Tippy said in an email that he cautioned councilmen during January meetings "about the historically high project costs with this company and the excessive hourly rates in their contract.
"I hope this time they will act in the best interest of the town of Schererville,” he wrote in the email.
Tippy also wants the council to contemplate additional investigation of the situation "to determine whether or not we are entitled to collect payment for possible excess charges.”
While a final decision about dismissing McDonough as Schererville's engineer is expected to occur Wednesday, Schmitt said "it will take some time" to choose a new firm to provide engineering services.
A call to McDonough Associates' Chicago office wasn't immediately returned.