Category Archives: Studies/Reports/Audits

Report: Government Wasted Millions in Katrina Contracts

Source: Associated Press, Thursday, March 16, 2006

WASHINGTON — The government wasted millions of dollars in its award of post-Katrina hurricane contracts for disaster relief, including at least $3 million for 4,000 beds that were never used, congressional auditors said Thursday. The Government Accountability Office’s review of 13 major contracts — many of them awarded with limited or no competition after the Aug. 29 hurricane — offers the first preliminary overview of their soundness. Waste and mismanagement were widespread due to poor planning and miscommunication, according to the five-page briefing paper released Thursday. That led to money being paid for services, such as housing or ice, that were never used.

No-bid prison medicine contracts were mismanaged, new boss says

Source: By STEVE BOUSQUET, St. Petersburg Times (FL), March 14, 2006

After a scathing audit of two no-bid contracts for prescription drugs for prison inmates, interim prison boss James McDonough is considering scrapping the deals and having the state do the work itself. “It was a poorly managed contract,” McDonough said after testifying Monday before a legislative committee. “I think this is a classic case of mismanagement.” At issue are two contracts worth $84-million between the prisons and TYA Pharmaceuticals of Tallahassee: one to repackage medications for prisoner use, the other to split tablets. The larger deal, worth $72-million, began in 1998 under a Democratic administration. The second, worth $12-million, was inked last year. ….. Among the problems cited: The Corrections Department did not seek bids, did not have adequate records of a former prison official who later went to work for TYA, did not run background checks on TYA employees and did not keep adequate paperwork.

State software system bid gets outside auditor

Source: DON WALKER, Journal Sentinel (WI), Feb. 7, 2006

Mindful of the fallout from the Adelman Travel contract, state Administration Secretary Stephen Bablitch has brought in former state auditor Dale Cattanach to oversee the selection process for a massive new information system the state wants to install. Bablitch brought Cattanach in as part of Democratic Gov. Jim Doyle’s directive to provide greater public assurance about the bid process, said Tom Solberg, a spokesman for the Department of Administration. “We want to make sure there is transparency to the process,” he said. “We want it to be fair.”

State audit finds privatized payroll often late, wrong

Source: By POLLY ROSS HUGHES, Houston Chronicle (TX), Jan. 18, 2006, 12:34AM

AUSTIN – Health department staffers discovered overdrafts on their personal checking accounts last fall when a private payroll contractor missed deposit deadlines for 80 workers, according to a highly critical state audit released Tuesday. Other state workers reported that they didn’t get paid on time or they didn’t get paid correctly, including for overtime. But when the Texas Health and Human Services Commission stepped in to fix problems under a contract with the global billing services firm, Convergys Corp., new obstacles arose.

Audit shows problems with state sales-tax receipts

Source: By DON WALKER, Milwaukee Journal Sentinel (WI), Dec. 22, 2005

A new review of the troubled computer system used to manage state sales-tax receipts has found new problems, resulting in underpayments and overpayments to counties that receive proceeds from the tax. The Legislative Audit Bureau released the report on the troubled Integrated Tax System (ITS) this morning. …… State officials paid American Management Systems $12.2 million for the system, but the cost has since ballooned to at least $27.6 million. The higher costs also are reflective of changes in the contract and changes in the scope of the computer system. In 2003, software problems within the system forced 57 counties to repay the state $24.5 million after the department overpaid them. Last summer, another glitch resulted in 23 counties being shorted $1.3 million and 35 others being overpaid about $2 million.

Auditor names 'unsatisfactory' group home

Source: James Goodwin, Springfield News-Leader (MO), December 8, 2005

State Auditor Claire McCaskill on Wednesday named a Springfield group home for mentally retarded adults as the facility where “unsatisfactory” living conditions were discovered during a routine audit last month. Among problems reported at the Sagamont facility: soiled items in a shower and the prescription drugs of a former client in an unlocked refrigerator marked “Healthy foods.” ….. Gene Barnes, president and CEO of the not-for-profit Arc of the Ozarks, which operates Sagamont, said the facility has settled all concerns.

Privatization of refuse removal and labor costs

Source: Gary A. Hoover, James Peoples, Journal of Labor Research, Volume 24, Issue 2, Spring 2003
(subscription required)

From the abstract:
We examine the labor-cost savings associated with privatization by comparing earnings and employment trends of public and private sector refuse workers. Findings suggest that high union earnings for workers in the public sector are a source of labor-cost savings in the refuse industry. Evidence on job changers does not indicate that earnings for this group of workers are a compensating differential. Metropolitan area employment findings suggest that municipalities are less likely to use union refuse workers in the public sector when a relatively small percentage of area residents belong to a union.

To Market, to Market: Legislating on Privatization and Subcontracting

Source: Ellen Dannin, Maryland Law Review, Vol. 60 no. 2, 2001

From the abstract:
So enervated is our opinion of public service today, it is a shock to conceive of building this sort of edifice for mere government workers – bean counters and paymasters at that. … We need to ask: when markets are not competitive, can the private sector improve on public sector performance even as it falls short of the competitive ideal? Although it is possible to attempt to create a market by dividing a public service into smaller units, doing so may lead to greater inefficiency, lack of coordination, duplication, and, as a result, greater expense. … Massachusetts is not at the opposite end of Arizona; it does not forbid subcontracting. … Arizona’s privatization legislation mandates that the Office for Excellence in Government develop a model to estimate the total costs for providing a state function and develop a method for comparing those costs to private sector costs. … Arizona, for example, charges its Office of Management and Budget with designing standardized methodology for how the state identifies and evaluates state functions to subcontract and with determining if future competitive contracting with the private sector and other government agencies is in the best interest of the state. … They content that public workers have an unfair advantage because they are familiar with the work and because agencies, as governmental entities, are not required to pay taxes. …