Audit Shows DAS Ignored Bidding Requirements for IT Contracts
Audit Recommendations Would Strengthen Controls in Bidding Requirements
Columbus – Officials in the Ohio Department of Administrative Services (DAS) ignored state bidding requirements in awarding some contracts to information technology vendors. However, because of control weaknesses in the procurement process, it’s impossible to verify whether the state overpaid for services.
The audit, begun following a report in The Columbus Dispatch, confirmed the agency disregarded its own purchasing policy and in the process appears to have circumvented the state Controlling Board. State auditors found that numerous policy safeguards to prevent waste and abuse do not exist and that those that do exist were not documented well enough to ensure that they were being followed effectively. The Ohio Inspector General’s Office’s continues to look at additional areas of concern in the procurement process at DAS.
“Because key information and documentation is lacking it’s impossible to know exactly what happened with these contracts,” Auditor Dave Yost said. “One thing we do know is that the process in place at DAS is not even close to being considered a ‘best practice.’ They can, and must, do better, and our recommendations will help the Department get its house in order.”
The auditors analyzed the current DAS procurement process for IT products and services purchased through State Term Schedules and offered recommendations to strengthen it.
- General improvement and clarification of procurement processes, which could include adopting federal procurement rules and safeguards that are far more thorough and rigorous than those used by DAS;
- Segregation of duties to ensure the person or department seeking to make a purchase is not the same person or department with the authority to approve the request. DAS already has taken steps to address this;
- Effective training for all staff in the procurement processes;
- Complete documentation of procurement procedures to ensure that policies are being followed;
- Establishing a transparent process and documenting justification in cases where competitive bidding is impossible because only one vendor supplies the product or service being purchased. In addition, these purchases should require state Controlling Board review and approval;
- Implementing more rigorous reviews of market prices to ensure that state agencies are receiving the best value for the products and services they buy;
- Requiring that all contracts for products and services have a schedule, a completion date, and an overall cost, to prevent repeated extensions of projects and open-ended costs;
- Requiring more transparency and detail in the prices vendors charge for services, particularly when a vendor is supplying multiple services;
- Adopting a tiered bidding system to ensure that agency purchases are made at competitive prices, particularly for big-ticket purchases.
After sharing results of the audit with DAS, the Office of Budget and Management and DAS issued an oversight policy directive that implemented many of the policy recommendations. The oversight policy took effect June 1, 2018.
A full copy of the audit can be found online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.
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