A state audit of the Department of Juvenile Services has found that the agency conducted “questionable” purchases for some routine services and didn’t follow state regulations on contract bidding.
The agency circumvented state procurement regulations by dividing contracts for regular services into smaller sums — $15,000 or less, according to a report by the Office of Legislative Audits released Wednesday. Staying under that amount allowed the agency to avoid a public bidding process or public notification of the awards, the audit said.
The audit also found that 19 contracts totaling $264,000 were questionable because they were awarded by DJS employees to two companies owned by the same person, and the two companies were the only bidders on 18 of the contracts.
“As a result, DJS did not maximize the State’s purchasing power… DJS employees were able to directly solicit, receive, and evaluate bids, and select a vendor without extensive involvement of DJS procurement personnel in the related procurement process,” the auditors wrote.
The Legislative Audits office has referred its findings to the attorney general’s Criminal Division for review. A spokeswoman for the attorney general’s office declined to comment Wednesday.
Secretary of Juvenile Services Sam J. Abed said Wednesday that the agency has since made reforms to ensure proper bidding.
The audit did not identify the companies or the types of services that those companies were hired to perform. Abed said they were contracts for maintenance services, such as fixing a leaking roof or broken air conditioning unit, that required quick repairs.
Abed said the agency hasn’t been splitting contracts, and that its priority is the safety and security of its youth and staff. When there are issues at its facilities that affect the safety and welfare of kids and staff, he said they must respond quickly.
“That’s the frustration,” he said of the auditing process. “We have an obligation to serve our kids and be responsive and keep our facilities in good condition,” he said.
From 2014 to 2016, the DJS made payments to 22 vendors totaling approximately $9 million, of which about $7.5 million was related to procurements of $15,000 or less, the audit found. One vendor received 204 payments totaling approximately $1.5 million, of which 202 payments were for $15,000 or less.
State regulations require a formal written competitive procurement and publication of the solicitation for contracts over $15,000, which must also be approved by the Board of Public Works or other agency personnel.
Purchases of between $5,000 and $15,000 require at least two bids, but can be solicited directly from vendors by the agency.
Abed said his agency has been cooperating with the attorney general’s office for the past year. He said his agency has not taken action against any employees as a result of the audit because it is awaiting information from the attorney general’s office.
“We have to wait, we don’t have the information at this point,” Abed said. Once they get information from the attorney general’s office, “we will take every action necessary,” he said.
The audit found other problems. It said the agency lacked adequate oversight for spending on youth care services. It found that the agency improperly held onto $9.7 million in unspent general funds and didn’t recover full amounts of available federal aid. It found some juveniles’ confidential personal information was not protected, and that the agency did not have controls to ensure court-ordered restitution was recorded and given to victims.