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Audit faults Missouri contracts

McCaskill reports that
the state is not following diversity standards set by a 1998 mandate.
Tuesday, October 28, 2003 | 12:00 a.m. CST; updated 6:15 a.m. CDT, Wednesday, July 9, 2008

JEFFERSON CITY — State agencies are not doing a good enough job when it comes to supporting minority- and women-owned businesses, according to a state auditor’s report released Monday.

“There are fundamental problems in the participation of women and minorities in purchases of goods and services and capital improvements projects,” State Auditor Claire McCaskill said.

A 1998 executive order set required levels of participation by minority- and women-owned businesses for capital improvement projects and purchases of goods and services. The goal was to increase the involvement of these businesses when a state agency purchases new computers, hires consulting firms or printing services, or contracts to build a new field office, McCaskill said.

The order states that at least 10 percent of the total expenditures on state projects, goods and services should come from minority-owned businesses and 5 percent from women-owned businesses. The auditor’s office reported that state agencies achieved participation of 9 percent by minority business enterprises and 3 percent by women business enterprises.

The report also scrutinizes practices of the Office of Administration, which is responsible for purchasing goods and services and contracting public works. The report found that the OA overstated the participation of minority and women-owned businesses on three projects.

In one example, a women-owned business completed and was paid for half of its $1.2 million portion of a project. However, the OA’s Division of Design and Construction reported the entire contract, rather than what the firm had accomplished.

Design and Construction administrators have also had problems overseeing the division’s use of minority- and women-owned businesses, the report states. Although administrators would make occasional visits to construction sites to inspect participation by minority- and women-owned companies, they failed to document their results.

There are also examples of the division counting the same business twice — those run by minority women were counted as both minority- and women-owned businesses.

The problem has less to do with participation by such businesses and more to do with reporting their involvement, said Walter Johannpeter, deputy director of the division.

“As far as I’m concerned, the program for Design and Construction is going well,” he said.

Johannpeter noted that the division is revising the way it determines “good faith” efforts, which are instances when participation requirements are waived after the department has demonstrated an effort to include minority and women-owned subcontractors. The division’s minorities contract coordinator will also be spending more time on construction sites to see that requirements are being met, Johannpeter said.

McCaskill recommends that state agencies make annual reports regarding their success in achieving participation goals. The Missouri General Assembly’s control over the budget, the influence of the governor’s office and the opinions of the public will all ensure the compliance of state agencies in buying from and hiring minorities and women, she said.


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