An Illinois agency that claims to have saved taxpayers $600 million by reducing waste and fraud has itself wasted money, granted multi-million-dollar contracts to politically connected firms, and failed to show it has saved money, according to a blistering audit by Illinois Auditor General William Holland.
Holland issued his report on Central Management Services (CMS) April 26. He held a news conference–his first in 12 years as auditor general–to announce the findings and defend himself against attacks by members of Democrat Gov. Rod Blagojevich’s administration.
“This is worse than just sloppy,” Holland said to reporters in describing the operations of CMS. Blagojevich revamped the department in 2003 to consolidate the awarding and maintenance of most state contracts, with the stated aim of making the state’s government more efficient.
Attorney General Reviewing Findings
Holland said he has sent a copy of the audit to Illinois Attorney General Lisa Madigan (D) for legal review. He said he did so because there are serious questions surrounding the awarding and management of state contracts to political insiders, including major donors to the governor’s political fund.
In addition to questioning contracts awarded and managed by CMS, Holland questioned more than $546,000 in expense reimbursements the agency has paid contractors.
Those expenses include parking at Chicago Bulls basketball games, dinners and drinks for state officials, rentals of seven sport utility vehicles for a contractor’s staff to drive, and a party thrown by a contractor to celebrate having won a $24.9 million state contract.
Officials Say Audit “Misleads”
CMS officials defended their practices and criticized Holland’s report, issuing a statement saying it “contains inaccurate and misleading findings.”
They say they have saved Illinois taxpayers $600 million since Blagojevich overhauled CMS. Holland’s audit, however, says there are almost no financial records showing the department has actually saved money.
Paul Campbell, assistant director of CMS, told Chicago Sun-Times reporters Dave McKinney and Chris Fusco for an April 27 story, “The organization we’ve built is, in many ways, best in class and will sustain those savings.”
Campbell has been nominated by Blagojevich to replace Michael Rumman, who unexpectedly resigned as director of CMS several weeks before the audit was released.
Acts of Intimidation Alleged
CMS also came under fire from some lawmakers for engaging in what State Rep. Jack Franks (D-Woodstock) called “acts of intimidation” against Holland before the report’s release. CMS officials asked for Holland’s own office contracting records and expenditures, apparently to try to discredit his review.
“I have never seen such a rotten, arrogant response, where they attack the messenger,” Franks said. “The governor’s cavalier response takes away from the severity of the issue.”
Franks is chairman of the State Government Administration Committee. He told reporters he plans to use Holland’s audit as the basis for committee hearings into the operations of CMS.
According to Holland’s audit, several contractors were allowed to draw up bid specifications and then bid on the contracts, giving them an advantage over competitors. Holland also documented an instance in which a contractor that originally lost a bid was allowed to submit a new bid to win the contract. Competitors were not allowed to submit new bids.
“The whole system has become a joke,” Franks said. “This was a routine annual audit. This was not an extraordinary audit, but the findings were.”
Steve Stanek ([email protected]) is managing editor of Budget and Tax News.