March 15, 2010

Public broadcasting faulted for spending millions without approval

Print More

By Nick DiMarco
Nick@MarylandReporter.com

The Maryland Public Broadcasting Commission has been faulted for spending millions of dollars for services without properly seeking competitive bids, executing a contract or requesting approval from the Board of Public works — all of which are in violation of state procurement regulations.

The findings come from a report released Monday by the Office of Legislative Audits. All told, the spending adds up to about $2.7 million.

The 11-member commission operates the six Maryland Public Television stations. In 2009 MPBC’s operating expenditures reached about $28 million, with the majority coming from viewers and corporate contributions.

MPT representatives vehemently disagreed with the audit, responding that it “omits critical facts and fails to provide the proper context to fully understand the circumstances at the time.”

Legislative Auditor Bruce Myers says that while the commission eventually agreed to abide by state regulations on five out of the six findings recommendations in the audit, “There’s a whole lot of disagreement before you get to that.”

The audit found that the commission did not follow state regulations when spending $2.7 million on marketing in 2005 and 2007. The commission also faced criticism for the way it paid contracted vendors.

The $1 million marketing cost in 2005 has come up in a previous audit. The measure appeared on a Board of Public Works agenda for approval in December, but was withdrawn and never returned.

The commission says it followed the advice of the Department of Budget and Management in making its purchasing decisions.

Myers said there was no evidence that DBM approved the procurement practices.

“We’re saying they had no former contract with these people. Then they went almost two years and spent a million dollars with them,” Myers said, explaining that one of the commission’s foundations, not under governmental control, employed the vendor.

The commission response in the audit indicated the procurement process was canceled because of financial issues. The agency said it replaced a manager assigned to the contract during the evaluation process citing a potential conflict of interest. According to the audit, the manager — part of a five-person board overseeing the contract — was referred to the Attorney General’s Office, Criminal Division.

The commission says it “strenuously” disagreed with the referral for prosecution. The audit’s findings suggested that employee’s involvement was a not a violation of Maryland’s ethics laws, the commission said.

“There is simply no evidence of any criminal conduct in these findings,” the commission said. “Although errors may have been made in the procurement process or in the payment and accounting of a single contract, there is absolutely no basis to refer this matter to the OAG Criminal Division,” the agency wrote in response.

While MPBC vehemently disagreed with findings in the report, the commission said it would comply with all of the audit’s recommendations.

Myers said that the amount of contention between the auditors and the commission was “rare.”

Spring Grove audit

Also Monday, auditors released a review of the Spring Grove Health Center in Catonsville. That review called into question two contracts worth a combined $50,000 that did not appear to have been bid properly. The Department of Health and Mental Hygiene agreed to refer the matter to the Attorney General’s office for criminal investigation.

According to that audit, health center officials could not demonstrate that winning bids had been submitted in time. Auditors questioned other documentation for the contracts as well. The facility was also cited for inadequate control over cash receipts, patient accounts and equipment.