Delaware County awarded millions to vendors without competition, comptroller says

Above: The seat of Delaware County's government, in Delhi, NY. Photo via the Delaware County website. 

New York state’s comptroller has found that Delaware County awarded millions of dollars to third-party contractors between January 1, 2013 and June 9, 2014 without soliciting competition, or, in some cases, requiring contracts at all.

A lack of “proper administration and oversight” plagues Delaware County’s contractor system in the Departments of Aging, Public Health, Mental Health and Social Services, according to a report released on March 6 by Comptroller Thomas P. DiNapoli.

“The County has awarded nine third-party contracts totaling $1.9 million without soliciting competition … and has paid three vendors $770,000 for various services without any written contracts with the vendors,” the comptroller’s staff wrote. “The lack of competition creates a risk that services will not be provided in the most prudent and economical manner.”

Of the 10 contracts in four departments that the auditors reviewed, only one of them was awarded through a competative process, the report found. It also found that Delaware County awards contracts to the same vendors year after year.

County officials told the comptroller’s office that putting contracts out to bid is difficult because of geography.

“County officials informed us they were not seeking competition because their geographic location limits the choice of providers,” the report stated.

Ethics board never established

The comptroller’s report found that although Delaware County’s Board of Supervisors has passed a resolution to establish a board of ethics, no such board has ever been convened.

“There is no one else helping to ensure that individuals are free from potential conflicts of interest in fulfilling their public responsibilities,” the report stated.

County officials didn’t disclose conflicts

Another issue is self-disclosure of conflicts of interest, such as when a county supervisor or a relative of one may benefit financially from a contract with the county. County officials are required by law to disclose potential conflicts formally in the procurement process.

Yet here, too, Delaware County fell short. According to the comptroller’s office, Delaware County’s supervisors had never formally disclosed potential conflicts of interest before 2014. Instead, they preferred to deal with conflicts of interest in an “informal manner.”

“January 2014 was the first time that any of the County Supervisors publicly disclosed their potential financial interests, when three of the County’s 19 Supervisors filed disclosures with the Board,” the report stated.

Inadequate oversight

The comptroller’s office found more issues in specific departments.

The Delaware County Department of Social Services does not formally reconcile payments, the report found. The practice dates back to the tenure of William Moon, who was the commissioner of Delaware County’s Department of Social Services for 35 years before he retired in December. 

The comptroller’s report also found that the Department of Mental Health made three payments to contractors without checking to see that the services were rendered.

“There is a heightened risk that the services being provided and the amounts paid are not in accordance with the contracts,” the report stated.

Negative outcomes?

James Eisel, the chairman of the Delaware County Board of Supervisors, responded to the comptroller’s critique by promising to review the county’s procurement policy and code of ethics and to address the oversight problems.

“The board generally concurs with the Comptroller’s findings and has taken steps to address each and every one of the seven recommendations in [the] report,” Eisel wrote in a response to the auditor’s draft report. But Eisel also objected to the tone of the comptroller’s report, writing that “a reader is likely to make erroneous inferences.”

Eisel asked the comptroller’s office to insert a sentence into its report stating that no negative outcomes have come from the county’s lax procurement procedures. In a curt response, the comptroller’s office refused.

“Because the County’s procurement policy does not ensure that competition is sought, the County cannot demonstrate there are no negative outcomes,” the report stated.

Update, March 11: We spoke with Jim Eisel, the chairman of the Delaware County Board of Supervisors, about the comptroller's report today. Eisel said that Delaware County has 90 days to respond to the comptroller's office with corrections to the county's policies.

"There will be corrective action, for sure," Eisel said. 

"We are going to update the ethics policy and probably establish an ethics board," Eisel said. "In the future, we are going to document why projects are not bidded. We will do disclosure forms."

He added that the individual departments cited in the comptroller's report will also correct the errors and bring their corrective policies before the Board of Supervisors.

Eisel said that the county often cannot receive competitive bids for projects because there aren't enough vendors to bid against each other.  

"They took us to task for not competitive bidding, when in fact in rural Delaware County there are many, many instances where we have put a project out to bid and there’s only one bidder," he said. "There's no giant conspiracy going on here."

Read the comptroller's report in full below: 

Delaware County Third-Party Contractual Services -- Comptroller Report March 2015