Recently in Audits/Reporting Category

Source: Mary K. Marvel A1 and Howard P. Marvel, Public Performance & Management Review,   Issue:  Volume 33, Number 2 / December 2009

 

Local governments that contract out services are faced with a complex problem of developing an appropriate mix of incentives to elicit performance from a diverse set of service providers, including networks of other local governments, mission-driven nonprofit organizations, and profit-maximizing firms. This paper employs agency and stewardship theory to motivate an analysis of rewards and sanctions used in service delivery relationships. Our findings, consistent with principal-agent theory, indicate that a significant proportion of local governments in our sample employ high-powered incentives with for-profit firms.

Source: California State Auditor, September 2009

HIGHLIGHTS

Our review of the personal services and consulting contracts for information technology (IT contracts) used by the Department of Health Care Services and the Department of Public Health (departments) revealed the following:

• Over the last five years, the State Personnel Board (board) has disapproved 17 of 23 IT contracts challenged by a union.
• Many of the board's decisions were moot because the contracts had already expired before the board rendered its decisions.
• Of the six IT contracts still active at the time of the board's decisions, only three were terminated because of board disapprovals.
• Health Care Services did not comply with state policy regarding the use of blanket positions and was disingenuous with budgetary oversight entities.
• Neither Health Care Services nor Public Health has a complete database that allows it to identify active IT contracts and purchase orders.
• The departments complied with many, but not all, state procurement requirements.
• The departments did not obtain the requisite financial interest statements from half the sampled employees responsible for evaluating contract bids and offers.

RECOMMENDATIONS

To create more substantive results from the reviews conducted by the board under California Government Code, Section 19130(b), the Legislature should do the following:

• Specify that contracts disapproved by the board must be terminated and require state agencies to provide documentation to the board and the applicable unions to demonstrate to the satisfaction of the board the termination of these contracts.
• Prohibit state agencies from entering into subsequent contracts for substantially the same services as specified in contracts under board review without first notifying the board and the applicable unions, allow unions to add these contracts to the board's review of the original contracts, and allow the board to disapprove the subsequent contracts, if appropriate, as part of its decision on the original contracts.
• Require state agencies that have contracts disapproved by the board to obtain preapprovals from the board--in a manner similar to the process that occurs for requests under California Government Code, Section 19130(a)--before entering into contracts for substantially the same services. Further, if an agency enters into a contract without the board's preapproval, the Legislature should allow the applicable union to challenge this contract and prohibit the agency from arguing that the contract was justified under Section 19130(a) or (b). Instead, the board should resolve only whether the subsequent contract is for substantially the same service as the disapproved contract.

Source: By Linda Gyulai, Gazette (Montreal) September 22, 2009

 

The verdict: The city should consider cancelling the largest contract in its history, the $355.8-million water-management contract.

 ......The city needs to overhaul its system of governance, particularly the way it awards contracts, to prevent a repeat of the episode, Bergeron concludes in his 170-page report, distributed last night at the last council meeting ahead of the Nov. 1 election.

Source: National Employment Law Project, August 2009

A new NELP report surveys state and local responsible contracting policies that create good jobs and deliver quality services, and recommends reforms at the federal level.

The Road to Responsible Contracting recommends the following key reforms to the federal contracting system:

1. Instituting more rigorous responsibility screening of prospective bidders to ensure that federal contracts are not awarded to employers that are significant or repeat violators of workplace, tax, or other laws

2. Establishing a preference for employers that provide good jobs in the contractor selection process, prioritizing firms that provide living wages, health benefits, and paid sick days

3. Quickly bringing on-line, expanding, and improving the newly authorized national contractor database mandated by the 2008 National Defense Authorization Act

4. Strengthening monitoring and enforcement of contractors' compliance with existing and new workplace standards.

Source: By Dan Mihalopoulos, Chicago Tribune (IL), June 3, 2009

 

City Hall's inspector general blasted Mayor Richard Daley's parking meter lease Tuesday, alleging the administration gave up the potential for hundreds of millions in additional cash when aldermen rapidly rubber-stamped the deal. 

While Inspector General David Hoffman put an official seal on what critics have been saying for months, the scathing report comes amid public outrage. Anger over the parking meter meltdown has yet to subside in a rare case where a blunder is sticking to a mayor who has outrun many controversies during his two decades in office.

 

Professional/Technical Services Contract Evaluations Required for Professional Service Contracts in Excess of $50,000

Minnesota Statutes 16C.08, subd. 4(c), requires that upon completion of a contract over $50,000, agencies submit a one-page report, summarizing the purpose of the contract, stating the amount spent on the contract, and including a written performance evaluation of the work done under the contract. This page allows interested parties the option to search all contract evaluations by agency or by vendor.

Evaluations received by the Materials Management Division since March 1, 2009, have been posted on this web page, which will be updated weekly. Evaluations submitted prior to March 1, 2009, are available for review at the Legislative Reference Library.

Source: POGO, March 25, 2009


Last month, the Government Accountability Office released a report titled, Excluded Parties List System: Suspended and Debarred Businesses and Individuals Improperly Receive Federal Funds, documenting 25 cases in which companies and individuals that had been suspended or debarred from federal contracting continued to receive contracts. Unfortunately, the report did not name the companies and individuals at issue.

POGO was able to obtain those names. The following is a reproduction of the case studies chart in the GAO report.

Source: The Florida Legislature, Report No. 09-09, February 2009

 
Full report in PDF format

Click on this icon for a brief narrated PowerPoint about the report.

    * Although the pilot project to outsource program oversight of two child welfare lead agencies experienced implementation setbacks, it is now operational. The pilot project has resulted in improved quality assurance and performance measurement systems for both the Department of Children and Families and the pilot lead agencies. The department has used the methodology developed by the outsourced program monitor to strengthen its statewide quality assurance system, while the pilot lead agencies have enhanced their internal quality assurance and quality improvement systems. Both the department and the lead agencies report that they will be able to sustain most of these improvements.

    * However, outsourcing program oversight of lead agencies has created several challenges. It has distanced the department from the lead agencies and thus reduced its firsthand knowledge about the quality of child welfare services. It has also reduced the department's control over the timing, quality, and scope of oversight and has increased monitoring costs. Given these challenges, we recommend that the Legislature consider not continuing or expanding outsourced lead agency program oversight.

Source: By Patrick Marley, Journal Sentinel (WI), Feb. 19, 2009


Madison - Gov. Jim Doyle wants to eliminate a law meant to ensure taxpayer money isn't wasted on contracting.

"Apparently, they just don't want to be accountable," said Sen. Rob Cowles (R-Green Bay), who helped write the law. "I'm just sort of amazed by the whole thing."

The move comes at a time when state government is set to receive more than $2 billion in federal economic stimulus money. Doyle aides said the stimulus money would not go toward contracting, but it remains unclear how all the federal money will be spent since some of it funds ongoing programs.

Source: By Eric Dexheimer, AMERICAN-STATESMAN (TX). Sunday, February 01, 2009


As the state's largest user of contract services, the Texas Department of Transportation has embraced outsourcing more than any other state agency, putting almost three of every four dollars it spends in the pockets of private companies. In 2007, that amounted to about $6 billion, according to a 2009 Texas Sunset Advisory Commission report.

....... And, as a review of recent TxDOT contracts and internal audits shows, in many cases the contractors are more expensive -- at times, vastly more expensive -- than having state employees do the same work.