Legislative audit faults relationship between former state tech chief and vendor | Arkansas Blog

Thursday, June 8, 2017

Legislative audit faults relationship between former state tech chief and vendor

Posted By on Thu, Jun 8, 2017 at 4:02 PM

MARK MYERS: Audit questions deals he struck for state as information chief.
  • MARK MYERS: Audit questions deals he struck for state as information chief.
Legislative Audit released a critical report today that sheds light on the abrupt departure of Mark Myers as director of the state Department of Information Systems last November.

The report says the agency entered some $8.2 million in contracts with a vendor with whom Myers had an unspecified personal relationship, in apparent conflict with state law.

Myers, long a Republican activist and a past Asa Hutchinson campaigner, was one of the governor's early picks to lead an agency that had some difficulties. On his departure, I mentioned that Myers had been pursuing a job in the private sector and suggested that could be a complication for his public role, particularly if the future employer did business with his agency..

A legislative audit review for the year ended June 30, 2016 concluded that the director (unnamed, but it was Myers, who took the job in January 2015) had a personal relationship with an unnamed vendor representative on three contracts worth $8.2 million. The analysis concluded that the former director appeared to have "violated standards of conduct contained in state law, potentially wasted state resources and did not adhere to the agency's technology policy."

The report said Myers' text and e-mail messages, stored on agency servers, "revealed a personal relationship between the director and a vendor representative in at least three procurement projects." The relationship "appeared to conflict with state law and the Agency's Technology policy." Myers resigned Nov. 23, 2016, but remained on the payroll through Jan. 1.

The projects:

* A $642,552 project to study data consolidation. The audit says the original contract with "Reseller A" provided for equipment, software licenses and services. Myers asked for a replacement invoice with services deleted. This change avoided legislative review of all contracts of more than $100,000 that include services.  The money has not been paid. The agency says it intends to void the contract and return equipment.

* A $584,521 equipment purchase for "unified communication" to allow video conferencing among state employees to reduce travel costs. Expected free integration services to use the equipment was not received from "Reseller B." As of February, the report said, the Agency had yet to utilize $255,901 worth of equipment.

* A $6.9 million job to increase bandwidth to state public schools. Several potential suppliers were contacted, but "after only a short period of time, the former director decided to use the vendor and reseller B, before any other quotes were received, resulting in a purchase of $6,973,922 in vendor equipment from Reseller B."

The report says bandwidth was increased from 5Kbps to 200Kbps per user, but use of the vendor without "sufficient input from agency personnel with technological knowledge, appears to be questionable and not in the best interest of the state."

The agency, now headed by Yessica Jones, declined to comment beyond the comment included as management response in the audit. That said the first project would be voided. It said that another vendor had been identified for the "unified communication" and that the department was "developing a strategy" to use the video equipment it purchased.

As to the upgrade of school bandwidth, the agency said it has been an "accepted departmental practice" for employees with technological knowledge to determine best goods and prices before making a recommendation. It said a policy would be formulated "in order to effectuate the best interests of the state."

The audit recommended that the agency comply with state law and "receive appropriate training on ethics and procurement law." The report was  discussed at a Legislative Joint Audit committee meeting today. I sought additional information from Legislative Audit. Its counsel replied:

We won't have any additional comment beyond what is contained in our report.

Upon inquiry, we have been informed that there is an ongoing criminal investigation by a law enforcement agency regarding this matter. Therefore, pursuant to Ark. Code Ann. § 25-19-105(b)(6), to the extent you are making a FOIA request, we respectfully decline to permit inspection of our documents.

I also have requests pending with DIS for the e-mails and texts that led to the audit conclusions, the name of the contract recipients and the vendor representative.

The audit doesn't say how the director's relationship with a vendor ran afoul of the law. But the report includes a preamble that says state employees are expected to do their jobs impartially to assure fair competition. "An abuse of public trust occurs when an employee solicits, accepts or agrees to accept any benefit for making a decision favorable to another person or otherwise exercises discretion in favor of another person."

I've also asked for a comment from the governor's office and sent an e-mail seeking a comment from Myers.

UPDATE: A Democrat-Gazette article on the audit said that a letter from Myers was distributed to legislators at the committee meeting that defended the contracts both as to price and procurement procedures.

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