Spring Grove Hospital Center officials doled out nearly $400,000 in “questionable” contracts and awarded work to personal contacts this year, sparking a criminal investigation, according to state auditors.
“It looks like they are skirting the state procurement requirements,” said Tom Barnickel, deputy legislative auditor in the state Office of Legislative Audits, which reviewed contracts between April and July.
Spring Grove, a Catonsville-based mental health facility, is a unit of the state Department of Health and Mental Hygiene.
The hospital’s maintenance department awarded $167,101 in projects to a single contractor, apparently avoiding a competitive bid process, according to http://www.ola.state.md.us/Reports/Hotline/SpringGrFraud08.pdf the audit released Wednesday.
Although bids were apparently received from two or three other companies, they were faxed to the department from the winning contractor. For 21 projects, bids were tampered with: The top portion of the fax identifying the sender was torn or cut off, auditors said.
Three companies that employed the same person at various times were awarded $232,000 in projects — many without a bidding process, auditors found.
Projects also were awarded to several contractors who had personal relationships with Spring Grove employees, such as living at the same home address — an apparent conflict of interest and possible ethics violation, auditors said.
Auditors were responding to allegations received through the state’s fraud hot line. The matter was referred to the criminal division of the Attorney General’s Office.
“It’s all under the radar,” Barnickel said of the procurement activities.
The contractors were not named, and health department officials declined to name the companies, citing ongoing investigations.
In response, the department has restructured its procurement process, and all staff will be retrained, said Renata Henry, deputy secretary for behavioral health and disabilities.
“The headquarters will do a systemic review of procurement processes at all other facilities,” she added.
Spring Grove’s procurement authority has been transferred to health department headquarters, and a committee of employees not in the maintenance department was formed to review bids, Henry said.
