Stadium Authority criticized in audit

The Maryland Stadium Authority has been sharply criticized by state auditors for awarding $66 million in construction contracts without normal bidding, for sloppy bookkeeping and lax board oversight.

The authority has handled millions of dollars worth of public projects, including Oriole Park at Camden Yards, M&T; Bank Stadium, a convention center in Ocean City and the expansion of the Baltimore Convention Center, and was involved in the recent renovations of the Hippodrome Theatre in Baltimore.


The auditors said that a $41.5 million contract awarded by the authority in June of 2001 was not advertised and that only two companies were invited to bid. A second contract for $23.4 million awarded in December of 2002 was not advertised and had only two bidders, they said.

The auditors also pointed out there was no documentation of the bid openings or formal evaluation of the bids.


"Without sufficient competition, the Authority lacks assurance that it is awarding contracts at the best value to the State," the auditors from the state's Office of Legislative Audits said in their report, which was posted on a state Web site yesterday.

Lt. Gov. Michael S. Steele, who has been leading an effort to open competition for work on government projects to minorities, called the audit report "a good example" of why the Ehrlich administration is seeking reforms in state bidding practices.

Steele said yesterday that formal proposals for reform were expected next week.

Carl A.J. Wright, the stadium authority chairman, rejected the auditors' criticism.

"The legislative auditors thought we should have more rules and regulations. I, personally, am not in agreement with that. If we had to live up to a long list of rules and regulations, we might get bogged down," Wright said.

"You can assure the citizens that the stadium authority is going to continue its tradition of excellence, and everything is in working order," Wright said yesterday.

The report, which covers the period between Dec. 20, 2000, and Dec. 31, 2002, also alleged that the authority's full board had not approved bonuses paid to management. It also said the board did not formally authorize moves that raised compensation and benefits for authority director Richard W. Slosson until after the auditors questioned the policy.

The report also alleged that Slosson had accepted hospitality from a contractor doing business with the authority, in violation of state ethics laws. It recommended that the stadium authority board refer that matter to the State Ethics Commission.


In May 2002, Slosson played golf at a private club in another state as the guest of the contractor and stayed at the contractor's home overnight. At the time, the contractor was doing business with the authority on a major construction project, and the situation was not disclosed on the executive director's disclosure form, according to the audit.

In a response included in the audit report the authority said, "the Executive Director wrote a personal check to pay for the non-reimbursable expense. A reprimand will be placed in the Executive Director's personnel file, and he has apologized for his actions and promised that he will be more careful in the future."

Slosson's office referred all calls to Wright.

"When you play golf with a contractor, it doesn't always look good," Wright said yesterday. "You can do it; you just have to pay for it yourself. He has reimbursed the money. We're moving on."

In a letter to the legislative auditor, dated Feb. 11, Wright wrote: "The audit recommendations relating to our procurement process would significantly limit the flexibility needed for this authority to be responsive to the demands of the unique projects that we undertake. To accept your recommendations in this area would defeat the purpose for which we were created."

The audit report also said:


The stadium authority's board, which has primary oversight responsibility, had not formally approved the authority's budgets. Total annual budgeted expenditures for fiscal 2002 were $116 million and for 2003 were $125 million.

The authority had not prepared annual rent calculations for any of its facilities so it could not be readily determined whether the authority owed the state money.

Bonuses totaling $36,500 were paid to management without an established bonus program and budgetary disclosure. "It appeared that certain documents were fabricated to support the bonus paid to the executive director."

The authority could not substantiate how it determined the amount of administrative costs it billed to another agency for managing two of its projects. The authority agreed to be paid $300,000 for managing the two projects which, collectively, had an estimated budget of $141 million.

Project funds totaling more than $19 million were commingled in the authority's working fund account in violation of state law and the comptroller's established procedures.

Proceeds from the sale of Memorial Stadium memorabilia totaling $164,589 were not transferred to the state's general fund as required.


Some of the allegations of sloppiness echo criticism made in at least one previous state audit of the authority.

Wright's answers to the current 26-page audit were contained in a 10-page response dated Feb. 11. It stated that the authority board acted in September of 2003 to correct a number of the problems identified by the auditors.

Wright said that the authority recognized the need for improvements in recordkeeping and documentation and had instituted the recommended changes. The seven-member board has taken steps to ensure tighter budget accountability and contractual compliance and has "taken back" certain powers that it previously delegated to the chairman.

Now the full board must approve the employment contracts of senior management, including all facets of their compensation packages. Wright said that the board had gone back and examined the raises and bonuses.

"Every salary transaction for the authority's senior management has been ratified and confirmed by the stadium authority board through a resolution approved in September 2003," he wrote.

Sun staff writer Stacey Hirsh contributed to this article.