HELENA – The state Department of Corrections does not have adequate procedures in place for procuring and monitoring some contracts, something that has been an issue for the agency for nearly a decade, legislative auditors said.
A recent audit found the department expanded some contracts without making another request for proposals, could be paying about $800,000 a year too much for meth treatment, and has been paying one vendor $1.6 million a year for services for the past three years without having a written contract.
Auditors recommend the agency comply with procurement laws, develop policies and procedures to better document decisions and evaluations, and put more focus on the importance of contract management. The Legislative Audit Committee is scheduled to discuss the report at a March 2 meeting.
Corrections Director Mike Ferriter said he plans to tell the committee that he knows improvements are needed.
“We have a large number of contracts and … the volume is growing and our procedures and follow-up probably hasn’t kept up with that,” he said, adding that the agency has recently named one attorney to be responsible for reviewing contracts.
In a written response to the audit, Ferriter agreed with nearly all the recommendations and said the agency will update its policies and make changes to strengthen contract management.
The audit found four programs with a cost of $4.5 million annually that began operations since 2005 and were added as an expansion to another program, rather than through a separate request for proposals, including an addiction treatment center in Glendive.
Two new programs added to the Passages women’s prerelease center in Billings in March 2007 cost the state $1.6 million a year and there is no signed contract, auditors said.
“I believe we’re close to having it signed,” Ferriter said Friday. “It’s been a long negotiation process. That certainly is something that needs to get taken care of.”
The audit also criticized the department for sending out a request for proposals for a prerelease center in Kalispell before it had community support for the proposed site.
Auditors also questioned the handling of a request for proposals for meth treatment centers, saying the resulting contracts are costing the state about $800,000 extra each year.
The state’s request for proposals allowed vendors the option of submitting proposals for a facility for just men, just women or a combined facility.
The audit said the state could have saved money by selecting the second-highest scoring proposal, which was for a coed facility, rather than separate proposals for men’s and women’s facilities.
The audit said the department’s method of scoring the responses did not account for the different possible bids and auditors were unable to find clear documentation of how the winning combination was determined.
Ferriter said he knew siting a meth treatment facility would be difficult so the request for proposals was flexible.
“The bottom line is we did achieve our goal” of making meth treatment available as a way to keep some people out of prison, he said.
“I think it is best for them to be segregated by gender,” Ferriter said. “Certainly cost is an issue, but outcomes and ensuring that the program is safe and there’s not issues around coed facilities, that has to be balanced in the equation as well.”
Earlier audits also criticized contract monitoring, and Ferriter said the agency has made some changes.
“I’m confident in saying a few more months, another year or so down the road, this’ll look different,” he said.