Juvenile Services Gets Retroactive Contract Approvals Worth $171 Million


ANNAPOLIS (November 18, 2010)—The Board of Public Works voted 2-1 Wednesday to retroactively approve $171 million in Department of Juvenile Services contracts, some more than two years old.

"We're being asked to legitimize services that have already been delivered," said Comptroller Peter Franchot, who voted against the measure.

Secretary of Juvenile Services Donald DeVore told the board that he learned about the lapse in procedure through an audit of the department a couple weeks ago.

"The board's been clear that it doesn't want retroactive contracts," DeVore said. "I was extremely upset about it. There will be changes and discipline as a result."

An audit report released in September, which revealed that the department failed to properly apply for an estimated $3 million in available Medicaid money, also found that the department failed to follow the contract approval requirements outlined by State Procurement Regulations. Additionally, the department did not maintain records to monitor contract costs.

In a test of 10 purchase-of-care contracts, the audit found that eight were not submitted to the Board of Public Works for approval.

After further investigation by the department, several dozen more contracts were found to have been awarded without board approval.

At the Board of Public Works Meeting Wednesday, the department requested retroactive approval for a total of 60 contracts. This will cost $171 million over the next three years, and of that, almost $54 million will pay for out-of-state services.

The Board of Public Works consists of Franchot, Treasurer Nancy Kopp and Gov. Martin O'Malley. Lt. Governor Anthony Brown sat in for O'Malley Wednesday because the governor was in Baltimore assessing damage from a tornado the night before.

Francis Mendez, deputy secretary for support services, accompanied DeVore before the board. Mendez said more than 100 youth, some of whom require psychiatric care or are violent offenders, have to be sent to specialized facilities in other states.

Franchot said the department needs to solicit competitive bids and objected to what he said was DeVore's "opinion" that not enough vendors offer the necessary specialized services.

"I have no way of evaluating that," he said. "We're being asked to rubber stamp non-competitive contracts. There's no way to tell if taxpayers are getting the best deal for their dollar. I just don't find the testimony particularly credible."

Kopp said that while many agencies have a lot of problems, she would rather not see a procurement agency like Juvenile Services deal with a recurring problem.

Of the recent audit's 14 findings showing "significant deficiencies" in the department, five were repeated from the previous audit released in 2007.

But the department calls this a positive, said Jay Cleary, director of communications for the Department of Juvenile Services, in an October interview.

In the last audit, conducted during former Gov. Robert Ehrlich's administration, 11 of the 16 findings were repeated, so Cleary celebrated the improvement.

"We're making progress," Cleary said. "It's absolutely a positive that there are only five repeats."

Other findings in the audit included problems like inappropriate overtime wages, duplicate salary payments, untimely employee background checks, untimely implementation and review of youth treatment service plans, poor record keeping regarding pharmaceutical invoices, and improper employee disbursement from the department's working fund.

In a written response, the department agreed with most of the findings.

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