Three state agencies overpaid for goods, legislative audit finds

36 cans of bug spray bought for $28.50 each

September 02, 2004|By Lynn Anderson | Lynn Anderson,SUN STAFF

Three state agencies paid as much as 28 times more than the best-available prices for janitorial supplies from July 2001 through last November, according to a report by the Department of Legislative Services.

The three agencies - the State Highway Administration, Springfield Hospital Center and Morgan State University - purchased goods worth a total of $1.4 million from 17 companies through the period that auditors identified as showing a pattern of paying exorbitant prices, the report said.

The criminal investigations division of the Maryland attorney general's office is looking into the findings, legislative auditor Bruce A. Myers wrote in an Aug. 23 letter to members of the legislature's Joint Audit Committee.

FOR THE RECORD - An article in yesterday's editions misidentified the agency that employed a state worker who received a gift card and other personal items from vendors selling janitorial and maintenance supplies. The employee was working for the Springfield Hospital Center in Sykesville, according to a state auditor's report. The Sun regrets the error.

Del. Van T. Mitchell, a Charles County Democrat who until a month ago served as co-chairman of the committee, said the state has improved its auditing system but that more must be done to stop misspending.

"What used to happen is that an agency would be audited, and then two years later we'd find they were doing the same thing," said Mitchell, who had not reviewed the full report but is familiar with the auditing process. "We have tried to address those issues, and the Audit Committee has become a lot more aggressive in its follow-up. ... It's getting better, but it can always be improved."

The report details how a highway administration employee used a corporate purchasing card to buy 36 cans of wasp and hornet spray at $28.50 each, when the same product was available from another vendor at $3.25 a can.

In a limited examination of 85 purchases that cost the three agencies about $64,000, auditors discovered that the state may have overpaid by about $50,000.

Auditors said eight of the examined purchases, totaling $6,500, were made from a Florida company that was indicted last September by officials in that state on 56 counts, including racketeering, conspiracy to commit racketeering and unlawful compensation.

The company is accused of providing personal items, such as gift certificates to restaurants, in return for the employees' buying products at inflated prices.

Over two years, Maryland highway administration employees bought $142,952 in supplies from the company, the report said.

The employee who made most of the purchases at the agency acknowledged getting some personal items, including a gift card to an electronics store, from three vendors.

In response to the audit, representatives of the three agencies said they would change purchasing procedures to guard against overspending, including requiring training and proof of bids from multiple vendors.

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