Releases & Statements

**FOR IMMEDIATE RELEASE**

May 19, 2009

Contact: Matt Mittenthal

212.669.4691; 917.597.4485

PA Gotbaum: State Comptroller’s Audit Finds DOE Awarded $342 Million in No-Bid Contracts; Doesn’t Follow Its Own Contract Rules

MANHATTAN – State Comptroller Thomas DiNapoli released an audit today requested by Public Advocate Gotbaum that reveals the Department of Education awarded a staggering $342 million in no-bid contracts over a three year period. The audit also revealed that the DOE does not follow its own rules pertaining to contracts.

Public Advocate Betsy Gotbaum said, “The findings of the State Comptroller’s audit on DOE no-bid contracts are alarming. Over a three year period, the DOE spent over 340 million taxpayer dollars on no-bid contracts – without any independent analysis of the process, oversight or transparency. This audit clearly shows that the DOE must be subject to the same procurement rules as other city agencies, as recommended by my Commission on School Governance. I urge the State legislature to include these recommendations when they reauthorize mayoral control.”

The State Comptroller’s audit of the DOE's no-bid contracts examines contracts awarded in FY06, FY07, and FY08.  The audit includes the following findings:

1. During the three fiscal years ending June 30, 2008 the DOE awarded 291 no-bid contracts that exceeded the $100,000 threshold.
2. The 291 contracts totaled $342.5 million
3. 173 of the 291 contracts (59 percent) had start dates prior to the Committee meeting at which the contract was approved. One contract for $16.5 million had a start date of June 1, 2006—25 days prior to the date it was required to be listed in the City Record
4. The DOE does not always document its compliance with all procurement requirements necessary to justify non-competitive contracts.  Forty-four contracts listed under the category of “other special circumstances” stated that the avoiding competition was “cost effective.”  However, the Comptroller’s audit examined a sample of four of these contracts and found that the DOE had not completed the cost/price analysis forms required to support the claims. 

The Comptroller’s audit also revealed that the Committee on Contracts does not keep meeting minutes. Without this record, there is no documentation of the committee’s decision-making process for non-competitive contracts.

The full report can be viewed here. 

Click here to see a video of Public Advocate Gotbaum discussing the findings.

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