| A Sacramento, Calif., law firm accused of collecting nearly $100,000 in excess fees for advice relating to a college savings program in Nevada has repaid the money to the state. The Orrick firm sent a check for $95,862 along with a letter dated July 3 disputing the findings by Nevada legislative auditors of the College Savings Plans of Nevada. Advertisement Auditors concluded Orrick was paid $428 per hour for services in 2001-02, although a contract specified a $225 per hour limit, which resulted in nearly $96,000 in excess funds. “We believe the Legislative Counsel Bureau (LCB) reached erroneous conclusions that could have been corrected by seeking clarification from Orrick before LCB published its audit report,” said the letter from James Houpt. But the letter went on to say that the law firm considers Nevada to be a valuable client, and the firm's “intent is not to risk that relationship.” State Treasurer Kate Marshall said the check already has been deposited in a state bank account. “They respectfully disagreed with the audit, but they also felt it was the right decision for them to make the overpayment identified in the audit,” Marshall told the Las Vegas Review-Journal. “The state of Nevada is a little over $95,000 better off for it.” As a result of the audit of the college savings program while under the review of then-Treasurer Brian Krolicki, Marshall sent a letter to the firm seeking a response. Orrick had served as bond counsel to the state at the time the services were rendered for the program. The contract allowed the firm to provide legal services to other state agencies as well. The firm currently does not have any contract to serve as bond counsel with the state. The treasurer's office is awaiting a response from another firm that did business with the state for the college savings program on a separate issue raised in the audit. A Georgia consulting firm, GIF Services, was overpaid $300,000, according to the audit released in May. The audit was sought by legislators after Marshall said in March that it appeared funds for the program were diverted for unauthorized legal expenditures and marketing costs. The audit also raised the issue of whether Krolicki broke state law by not depositing $6 million in state-earned fees into the state treasury. The audit has been turned over to the attorney general's office for an investigation. Krolocki, now lieutenant governor, has said he broke no laws in his management of the program during his eight years as treasurer. The program was established by the 2001 Legislature to allow parents to invest money in mutual funds to build up college funds for their children. None of the money that parents invested is missing or ended up in an improper account, according to the audit. |
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