A legislative audit of the Maryland Department of Transportation Secretary’s office found that the office circumvented state procurement laws by procuring services outside the scope of executed contracts.
MDOT used various contracts, including contracts executed by SHA, to perform certain services that were outside the scope of those contracts. As a result, MDOT circumvented State procurement regulations by not bidding these services or modifying the contracts and obtaining Board of Public Works (BPW) approval of the modifications. Further, certain payments were made without adequate support.
The audit analyzed $8.4 million in contract payments. The auditors found a payment totaling $105, 303 for rail safety inspections not authorized by the specific State High Administration contract. The contractor that performed the rail safety work was paid under an expired contract. Auditors also found $48,000 in payments did not include documentation of travel expenses and hours billed, including a $4,600 duplicative payment.
MDOT also used contracts to develop an Environmental Management System outside the scope of related contracts.
Initially, MDOT used an existing MDOT transportation policy and planning contract to carry out the information system development. However, other unrelated MDOT and SHA contracts were subsequently used to continue this system development, but no contract modifications were prepared. Per MDOT and SHA’s records, the cumulative payments made for this work totaled $461,300 as of December 2011. The billings related to the SHA contracts were paid by SHA and were to be reimbursed by MDOT. SHA had billed MDOT approximately $205,400 related to these tasks and received reimbursement from MDOT of $95,411.
State regulations require all procurements over $25,000 to be competitively bid and, that any contracts in excess of $200,000 must be approved by the Board of Public Works.
The audit also disclosed several deficiencies in how MDOT’s Consolidated Transportation Program, leading to millions of dollars in expenditure discrepancies with state financial reports.
The CTP serves as budgeting and planning tool used by MDOT to evaluate transportation projects. MDOT’s modal agencies develop cost estimates and expenditure data, and enter them into the Capital Program Management System. MDOT annually updates CPT with CPMS data.
OLA found that MDOT “had not established adequate procedures to verify the accuracy of expenditure and estimated cost data recorded in CPMS by MDOT’s modals to help ensure the reliability of data used for decision making purposes.”
According to the report MDOT stated that it reconciled modal agency expenditures entered into CPMS to the actual expenditures in the state’s Financial Information Management System. However, OLA noted that the reconciliations were not documented and limited to total expenditures not project level data. OLA compared modal agency CPMS expenditures to FIMS and found a $1.5 million discrepancy at one agency and $1.9 million at another.
MDOT did not adequately monitor access to the CPMS system according to the report. There is no formal process to document user access requests and approvals. OLA tested 31 individuals from CPMS user reports and found that 13 individuals had access to the system despite the fact that access was not necessary to perform their job duties. More alarming, is that some employees had access to CPMS three years after their employment with MDOT ended. OLA noted, “Consequently, inappropriate adjustments could be made to the data.”
These findings come a little over year after another audit uncovered serious ethics violations at the State Highway Administration, some involving a revolving door or former employees profiting off of contracts they awarded when they were employed at the agency.
In touting his in touting his ballyhooed State Stat program, Governor O’Malley, loves to say “if you’re not measuring it, it’s not getting done.” Apparently he’s not measuring what’s going on in his own administration.