The state auditor’s office is scrutinizing potential improper bidding and spending practices by the Mississippi Department of Education following a report issued by the legislative oversight committee.
In a report released Monday, the Legislative Committee on Performance Evaluation and Expenditure Review (PEER Committee) concluded that the Education Department entered into multiple contracts throughout fiscal years 2014-2016 “having apparent similarities in scope of work and for amounts that collectively exceeded bid thresholds, rather than competitively bidding contracts for such services.”
PEER had been asked to review changes in state procurement laws following the 2014 bribery scandal in the Mississippi Department of Corrections. PEER also studied several contracts entered into by the state Education Department in particular after legislators raised concerns. As a result, the committee recommended the state auditor investigate the legality of the department’s practices.
Mississippi Today reported on several of the same contracts last year.
Patrice Guilfoyle, spokeswoman for the Mississippi Department of Education, said Monday that officials at the department had not seen the report yet and could not respond to questions.
However, in its full response to the committee, which is not included as an attachment to the report, Department officials laid out the differences between individual contracts with each company.
“While it may appear to a layperson that the contracts in question are similar in the scope of services, it is the position of the MDE that these contracts are distinctly different in scope,” State Superintendent of Education Carey Wright wrote in a letter to the committee in June. “These contracts involved multiple program offices with different project managers, timelines, and schedules for deliverables. The contractors were engaged to provide services that were outside the existing capacity of agency staff and/or resources …”
The PEER report highlighted contracts and relationships with several companies: Research in Action, the consulting group owned by former department employee J.P. Beaudoin; Blue Sky Innovative Solutions, the former company of current department employee John Q. Porter; DataOne IT Solutions; and The Kyles Company.
“A reasonable person could conclude this contracting practice is an inefficient use of resources,” the report stated.
At the time the contracts were awarded, state law required agencies to solicit bids for personal services and information technology contracts at or above $100,000 (after changes made in the 2017 legislative session, personal services contracts have to be bid if they are $75,000 or more).
The report raised questions about five separate Research in Action contracts totaling $200,855 for similar services over the course of fiscal year 2015. Each of the Research in Action contracts was less than what state law requires agencies to bid, but when combined exceeded the $100,000 threshold and should have been bid out, the report suggested.
The Mississippi Department of Education, however, detailed the differences in the five contracts in its response to the committee. Each dealt with development of different products, such as a teacher evaluation system, an audit process for the new statewide accountability system and a special accountability system for certain school districts that used alternative assessments.
“The contracts were established as the need for such services arose. It would have been impracticable to anticipate such services in advance and conjointly, as these contracts involved multiple program offices with different project managers, timelines, and schedules for deliverables,” the Department’s response stated.
Four of the contracts contained the same category codes, which usually alert those monitoring the state’s contract oversight system, or MAGIC, but did not because of a flaw in the system, the report concluded. That flaw has since been corrected, however.
The committee also noted that the Department contracted with Research in Action again earlier this year shortly after Beaudoin resigned.
The report uncovered a similar situation with Blue Sky for IT services. The multiple contracts during fiscal year 2015 all individually came under the threshold for bidding but exceeded the threshold when combined at $384,464. However, because Mississippi Department of Education employees categorized the contracts under different codes despite them being for similar services, the state’s oversight system was not flagged.
When asked why the contracts were coded differently, the MDE responded that multiple staff members assign codes to contracts, the PEER reports said.
“The MDE contends that because MAGIC (the state’s oversight system) has more than 7,000 procurement codes, including 76 for consulting services, it is possible that different department procurement staff assigned different codes to similar contracts,” the report continued.
The committee also questioned the Mississippi Department of Education about the overlap in contracts with Blue Sky and the hiring of Porter as the Chief Information Officer, asking why it did not terminate the two contracts set to end on June 30, 2015, before hiring Porter on June 1, 2015.
“No services were performed by Blue Sky Innovative Solutions after June 1, 2015,” the Department responded.
It also stated that each contract covered different services, and that when Wright originally came to Mississippi in 2014, the need for a revamp of the information technology department was obvious.
“The first month on the job Dr. Wright was given inaccurate data to send to the school districts and parents. She was provided three initial iterations of the data that were found to have errors,” the Department’s response to the committee described. “Upon receiving the fourth version of the data, the information technology department guaranteed the data was finally accurate and the data was disseminated, beyond the deadline, to parents. The data was then found to be inaccurate.”
That experience and other concerns prompted Wright to prioritize an IT overhaul, according to the response.
The PEER Committee also raised concerns about $214,469.70 in payments made to The Kyles Company for computer-related goods and services. Because the department had no contract with the group, there was no review of the payments and “there is no assurance that the goods and services were procured at a competitive rate,” the report stated.
In addition, the report claims the Department employee who handled these purchases is no longer employed and other employees can’t locate the paperwork associated with the orders.
The state auditor’s office said Monday afternoon it just received the report and it has not yet been reviewed in full.
“We anticipate the report to be reviewed by senior staff tomorrow (Tuesday) afternoon,” spokesman Logan Reeves said.