The Department of Human Resources overpaid for contractor services and lost out on millions of dollars in federal funds, according to a new state audit released Monday.
“Deficiencies in the awarding of computer services contracts ? may have precluded the state from receiving the best value,” chief auditor Bruce Myers said in the report.
The auditors said the department overpaid for some contractor services and lost out on $3.5 million in federal funds by not seeking advance approval for a contract extension. The agency also wound up discouraging all but one bidder for a $110 million contract to both host and maintain the computer services it uses to pay welfare checks and for foster care, aid to the disabled and other services. “DHR combined what were previously separate contracts into a single procurement,” Myers said.
Human Resources Secretary Brenda Donald agreed to some of the criticisms in the report but disputed others. Most of the problems found by the legislative auditors occurred during the previous administration of Gov. Robert Ehrlich, before Donald took over this year.
Donald said the department had consulted with numerous officials but not the vendors themselves before bundling the hosting and maintenance contracts together. A number of companies told the auditors they were unable to fulfill the entire contract, the report said.
“Because the end result was limited competition, DHR has followed the audit recommendation and will bid these services in smaller contracts,” Donald said. However, the agency also believed that “onerous contract terms and conditions” might have limited competition as well. The department denied that it failed to provide the Board of Public Works under Ehrlich with accurate information about the contract.
The department also denied it dragged its feet in negotiating a contract extension for an electronic benefits transfer system. It said it initiated the procurement 22 months before the contract was up but was delayed “due to circumstances outside the control of DHR,” Donald?s response said.
