Sloppy management by city agencies has resulted in overspending on contracts and a lack of oversight of contractors -- at times leaving officials in Baltimore unable to even verify that work paid for was actually done, a series of audits has found.
In one case, auditors said, the Department of Public Works paid two air-conditioning repair companies almost $2.7 million for work over a two-year period without a contract while evading scrutiny by the Board of Estimates or the public.
Without a contract and the oversight a contract requires, auditors said, they were "unable to verify if the work billed by the contractors was ever done."
The audits did not suggest that there was any illegality or fraud on the part of the contractors, or that air-conditioning repair work was not done by the two companies, JCM Control Systems Inc. and the Len Popa Co.
However, the audits did say there was "strong evidence" to suggest that public works officials used billing procedures intended to avoid review by the Board of Estimates -- the five-member body of the city's top elected and appointed officials that meets in public session to authorize spending.
The report on the air-conditioning contract was contained in one of five audits of city agencies for a three-year period ending Feb. 28. The studies were done by the city Department of Audits, headed by City Auditor Allan L. Reynolds.
Besides the air-conditioning work, the audits cited other examples of questionable practices. Among them:
* A failure to make routine checks of mileage reports and sign-in sheets resulted in overcharges of $227,144 by 14 school bus contractors during the 1989-1990 school year. The audit said some of the companies that overcharged the city during the audited period had also been caught overcharging the city on an earlier contract during the 1981-1982 school year.
As a result of the audit, the school department met last week with bus company representatives and told them they would have to return the money.
* The Off Street Parking Commission awarded a competitively bid $177,000 contract for cleaning and maintenance of 29 city-owned parking lots, then gave another $750,000 worth of work to the same firm without competitive bidding.
In this case also, the audit found that the money was spent without assurances that the work was done. The absence of competitive bidding, invoices and other controls "create the probability that costs incurred were excessive," the auditors said.
Robert T. Schaffner, the city's parking facilities manager, disputed the audit's finding that the contract was improperly administered.
"I know what they said, but it's just not so," Mr. Schaffner said. "The invoices are in the records."
Mr. Schaffner said the practice of hiring contractors on competitive bids and then expanding the contracts without competitive bids has long been used by the city to save time.
He said all future parking lot repairs will be competitively bid, but added: "I can almost guarantee it will take longer."
* The competitive bidding process was again ignored when a company that was hired to do highly specialized concrete work was given an additional $200,000 in routine concrete and painting work that required no specialization and could have been put out to bid.
Mayor Kurt L. Schmoke has stressed repeatedly during his re-election campaign this summer that he is running a tight ship fiscally and that his skillful management of the city's finances has spared Baltimore drastic cuts in services and layoffs.
A spokesman for the mayor, Clinton R. Coleman Jr., referred inquiries about the public works contract audits to that agency's director, George G. Balog.
Mr. Balog did not return telephone calls inquiring into the audits.
The report on the air-conditioning work involved by far the largest amounts questioned by the auditors. It showed that the city paid the contractors $2,677,763 on a non-competitive "emergency" basis even though the work was mostly routine maintenance.
Records detailing the repairs were not maintained, making it impossible for the auditors or public works officials to determine whether the work was done.
The report said that to avoid review by the Board of Estimates, bills to the city from the two air-conditioning companies were split -- sometimes as many as six ways -- to bring the face amount on each under the $5,000 limit for which approval by the board is needed.
For example, cleaning the air-conditioning ducts at the Broadway Market in July 1988 cost the city $23,480. But the Board of Estimates was never informed because the cost was spread among five separate invoices.
"It is unrealistic to believe that two contractors could perform in excess of $2,600,000 of work over two years and never have a job exceed $5,000," Mr. Reynolds wrote in the audit report.
Of the two air-conditioning contractors who got the work, JCM Control Systems Inc. received $1,147,113 and the Len Popa Co. received $1,530,560.
Leonard J. Popa, chief of Len Popa, said the Public Works Department routinely divided work orders to ensure that his company never submitted a bill larger than $5,000. "This was a common practice," he said.
The auditors recommended that the city develop a maintenance plan to avoid the need for emergency billing and allow better control over spending, which the Public Works Department has agreed to do.