Legislators to discuss findings of MPT audit

December 03, 2003|By David Folkenflik | David Folkenflik,SUN STAFF

The state's legislative auditor has found what he contends are numerous instances of Maryland Public Television awarding contracts and bonuses without appropriate safeguards, including a possible conflict of interest that has been referred to law enforcement officials for further investigation.

Legislative auditor Bruce A. Myers' financial report, dated Nov. 24 and delivered yesterday to MPT executives, will be the subject of discussion at an afternoon meeting of state lawmakers who serve on a joint House and Senate committee on audits. The report covers a three-year period.

Robert J. Shuman, president and chief executive officer of MPT, responded in a letter saying no money was lost to MPT or the state and that procedural missteps are being addressed. But he complained to Myers that his report was unduly punitive.

"We've welcomed the proverbial `fresh set of eyes' and the past spirit of cooperation that flourished before, during and after each audit," Shuman wrote. "This year, the tone of the audit was vastly different from that of earlier years, and the experience was not nearly so constructively beneficial."

Among the audit's findings:

MPT might have violated conflict-of-interest principles by allowing Beverly Bricker, then vice president for interactive at MPT, to award a $54,000 subcontract on a Web design project to her live-in boyfriend without putting it up for bid.

Though neither party was identified by name or position in the audit, The Sun has previously reported on the incident, which has been referred to law enforcement officials for review. Neither Bricker nor her boyfriend currently work for the state television system.

MPT improperly failed to seek bids on six contracts totaling $2.2 million for Web design projects.

MPT "artificially divided" a project worth about $540,000 into smaller contracts to circumvent state regulations requiring contracts larger than $25,000 be reviewed by the state Department of General Services and approved by the Board of Public Works.

Bonuses of $760,000 were awarded but not submitted to the Department of Budget and Management for required review. The audit also found that MPT had failed to devise and document specific goals to justify the payment of some bonuses.

MPT allowed slipshod handling of some bank accounts and transactions with the Maryland Public Broadcasting Foundation, its fund-raising arm.

MPT failed to bid four contracts given to a travel agency that was headed by Lourdes S. Morales, a member of the foundation board. The trips were arranged by the firm to raise money from MPT supporters. The auditor questioned about $10,100 deducted by the travel agency from the amount it forwarded to MPT.

Shuman, in his letter, and Larry D. Unger, MPT's executive vice president, in an interview yesterday evening, acknowledged shortcomings in the state broadcasting agency's procedures and bookkeeping. While undertaken by well-meaning staffers under tight pressure, Unger said, the circumvention of state procurement rules was inappropriate. MPT is setting more specific internal safeguards and will adhere more strictly to state policies, he pledged.

But the two officials said no ill financial consequences arose from those lapses. And they defended other actions. MPT awarded the $2.2 million in past Web contracts under an exemption for artists - as it has for years covered in previous audits without objection, according to Unger.

The bonuses were based on guidelines provided to the relevant state agencies, he said, though the resulting dollar figures were not. "We didn't do the math for them," Unger said yesterday.

Unger said Morales' longtime link to the travel agency was disclosed to the Maryland Public Broadcasting Commission's executive committee, as specified under state ethics guidelines. "To be honest," he said of the no-bid situation, "I don't know how much more we could have done."

Asked about the auditor's charge, Morales said yesterday that she sold the firm she founded, World Travel Concepts, five years ago. It closed its doors roughly two years ago, she said, but did not profit from arranging any trips for MPT. "It probably did [business with MPT], yeah, but I didn't have any links with the agency," she said. "That's a big misunderstanding."

The report, focusing largely on state procurement violations and other regulations, surfaces even as a commission impaneled by Gov. Robert L. Ehrlich Jr. has recommended that MPT be privatized in a sale to its fund-raising foundation.

Unger says such a move might be a mixed blessing. "We would certainly like to have more flexibility in procurement," Unger says. "Most of these [objections involve] procurement regulations, and I would say most people in the state find these difficult to deal with. But that does not mean that this would be a wonderful tradeoff."

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