State Auditor Yost investigating IT contractor abuse

Posted Apr. 11, 2017 by

State Auditor Dave Yost says he’ll take a good hard look at what appears to be numerous unbid and unnecessary IT contracts with the State of Ohio. Last week the Columbus Dispatch released a report cataloging a series of IT contracts worth millions of dollars that were never put out to bid and could be mired in conflicts of interests involving high-level administrative staff.

The Dispatch reported on at least two large IT contracts, both originating from the Dept. of Administrative Services, but which are housed in ODJFS and Medicaid.

Much of the Dispatch reporting has focused on whether or not the contracts were properly bid or not; in other words: was it legal to not seek competitive bids?

But members of the union’s Article 8.05 committee that examines IT work in state government have a slightly different view: unbid or properly bid, IT contracts cost taxpayers more – in some cases millions more – and are less efficient than building systems from the ground up in-house. And these contracts have exploded in recent years.

Large IT systems often suffer from the “dump and run,” according to IT union leader Jim Benedict, an Infrastructure Specialist for the Ohio Dept. of Job and Family Services. In those cases, contractors are brought in to build big systems, but once the project is complete, either ignore or willfully undermine the transfer of those duties to permanent employees. So, contractors either find ways to extend their stay, or leave without properly training permanent IT employees.

For years, OCSEA activists have been pushing the administration to drop the widespread contracting out of IT, but it’s mostly fallen on deaf ears. In fact, between 2012 and 2015, the number of permanent state IT bargaining unit employees actually dropped 15 percent, even though there’s more IT work than ever. During that same period the money spent on outside IT contracts more than doubled: from $200 million to $428 million.

Further the use of IT temporary workers, also called staff augmentation, has greatly expanded in recent years. The contract for just one staff augmentation company ballooned from $18.6 million in Fiscal Year 2013 to $52.5 million in Fiscal Year 2015. Meanwhile the state cut 82 IT positions during that time at a reduction of only $9.4 million.

Yost’s audit is expected to take four to six weeks, according to the Dispatch. Please stay tuned for more on this story. Read the story here.