Audit critical of state phones

Report finds unregulated use of cells by workers, waste, inefficiencies

$500,000 could be saved

Lax oversight, business practices blamed for costs

February 19, 2003|By Tim Craig | Tim Craig,SUN STAFF

Maryland's practice of giving some employees cellular telephones is so ineffective that auditors have little idea how many phones the state owns or whom workers are calling at taxpayers' expense, according to a legislative audit.

The report by the Department of Legislative Services found the state could save at least $500,000 by putting in place a few cost-effective procedures that are the rule at many major businesses and governments.

"We believe that the present cell phone program as structured by [the Department of Budget and Management] and implemented by state agencies and DBM has contributed to seemingly unregulated use in cell phones, leading to waste and inefficiencies," the audit stated.

The oversight was "so lax" that neither the budget department nor the four vendors who supply phones to the state could determine how many cell phones are being leased by Maryland, according to the audit.

Auditors estimated the state spent at least $5.3 million on 6,700 phones last year.

"It's clear to me we need more accountability and oversight," said state Budget Secretary James C. "Chip" DiPaula.

DiPaula said he and Gov. Robert L. Ehrlich Jr. are in the process of reviewing the auditors' findings and plan to make immediate changes.

The report, prepared by legislative auditor Bruce A. Myers, suggests significant changes can be made if the state adopts simple business practices such as negotiating with vendors for the deals they give other large corporations.

The state has more than 100 service plans that are similar to plans offered to the public.

That means many of the plans for state phones offer free minutes on nights and weekends -- but no price reductions during business hours. The audit estimated the state could save up to $200,000 by negotiating savings with vendors.

The audit also found considerable savings could be found if supervisors did a better job identifying who actually needs a cell phone.

About one-third of state-owned phones were issued to people who used them less than three hours in a year, costing the state $122,000, according to the audit.

In a letter to the General Assembly Joint Audit Committee, Myers said agencies were also giving cell phones to employees who should not be receiving them.

And some state workers appear to use their phones too frequently.

The audit found that some workers use the phones to make thousands of dollars worth of personal calls. The employees did not appear to have ever been asked to reimburse the state for those calls.

Auditors analyzed 47 random phones and discovered a total 53,500 minutes -- 18 percent of all calls made -- to be of a personal or nonbusiness nature last year. Tens of thousands of additional minutes could not be determined as either business or personal calls.

"Almost 10 percent of the state work force has cell phones, and we need to have proper oversight of their collective use," DiPaula said.

DiPaula said many of the problems stem from decisions made in the previous administration. He said former Gov. Parris N. Glendening's administration often entered long-term contracts. The contracts made it difficult to keep up with technology and associated savings.

But most of those contracts end later this year, which DiPaula said will enable the Ehrlich administration to revamp cell phone policies.

Although still in the early stages, DiPaula and Ehrlich say they will try to negotiate better contracts and make supervisors more accountable for their cellular phone use.

"Governor Ehrlich was elected to restore honest government to Annapolis," said Ehrlich spokesman Henry Fawell. "He fully intends to implement measures to keep this administration responsive and accountable to taxpayers."

The Senate Budget and Taxation Committee will discuss the audit next week.

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