Waste of the Day: Oklahoma Awarded Millions in No-Bid Contracts
Topline: The Oklahoma attorney general is calling on Secretary of Tourism Shelley Zumwalt to resign after state auditors questioned roughly $27 million of federal funds spent under her watch.
Key facts: Auditors reviewed $13 billion of federal money spent by Oklahoma in fiscal year 2022, mostly from COVID relief funds.
Auditors said that Oklahoma is “rapidly becoming a no-bid state,” which would be a “great disservice to taxpayers.”
The state’s agencies are required to use a competitive bidding process when buying goods and services from private companies. This allows the state to obtain the best price and protect taxpayer money.
But auditors say the state Office of Management and Enterprise Services (OMES), which Zumwalt used to lead, ignored this requirement. Instead, high-ranking employees were allowed to sign contracts with any company of their choosing without a bidding process.
The audit claims that OMES was unable to explain how their revised system benefits taxpayers.
Auditors also found multiple conflicts of interest within OMES’ contracts.
OMES gave $1.1 million of no-bid contracts to a consulting firm run by a former employee, even though the firm did not “have the necessary experience for administering” the $1.2 billion grant it oversaw.
The contract was paid before services were rendered, violating state law. Auditors couldn’t even figure out what some of the payments were for.
Another contract worth $7 million went to a software company where Zumwalt’s husband is the vice president.
OMES also spent $6.5 million to move Afghani refugees to Oklahoma hotels, which was not what the federal grant was meant for.
Background: OMES spent over $70 million on payroll for 1,642 employees last year with some making up to $225,000, according to records at OpenTheBooks.com.
Zumwalt recently got a raise last September to bring her salary to $265,000.
Critical quote: “This level of self-dealing represents an unforgivable breach of trust that disqualifies Ms. Zumwalt from overseeing the expenditure of our tax dollars,” Attorney General Gentner Drummon said in a statement.
Supporting quote: “The auditor’s report is misleading. A thorough review of this situation would have easily cleared up any confusion,” Zumwalt said in a statement. “Transparency has always been a top priority of mine, and I will not be resigning.”
Summary: Awarding government contracts to the first taker is certainly the most convenient way of doing business, but public money deserves more rigorous stewardship.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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