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Apr 13, 2007 - 01:00 AM
by MICHAEL R. BLOOD, AP Political Writer
Massive Calif. contracts database riddled with errors, omissionsLOS ANGELES, CA -- The state Mental Health Department agreed to pay a Los Angeles hotel $877 million in 2005 to hold a two-day training conference, according to state records. $877 million? For a two-day conference?
It's wrong. Not even close. The actual contract was $36,200 and the agency spent only about $21,000, invoices show.
Inclusion of the dramatically higher amount in a vast computerized index of state contracts was an honest mistake, the result of a worker typing a billing code where the contract's value should have been listed, officials say. An attempted fix created a duplicate listing, leading to confusion rather than clarity.
Those problems point to a larger issue: The database set up to provide a window into how California spends billions of taxpayer dollars is badly flawed. The inventory of tens of thousands of contracts and purchases is littered with typographical errors and jargon, undercut by omissions and weakened by uncertainty over what gets listed, when and by whom, an investigation by The Associated Press has found.
The General Services Department, which runs the giant system, acknowledged "gaps" in the records and said that after AP inquiries it is notifying all departments "to precisely follow the guidelines" for entering information and to report errors immediately. DGS "will continue to make improvements," the statement said.
Interim Director Will Bush declined an interview.
The genesis for the database was a 2002 audit finding a $95 million software contract with Oracle Corp. pitched as a way to save money was in essence a $41 million rip-off. Several days after the no-bid contract was signed, Oracle gave a $25,000 campaign contribution to then-Gov. Gray Davis. After an outcry, the contract was dropped and Davis sought to make amends.
"I am determined to ensure that taxpayers get their money's worth and that all state contracts withstand scrutiny," Davis said in announcing plans leading to the database.
Dubbed the State Contract and Procurement Register System, the system was set up in 2003 as a way to record nearly every dollar the state spends on goods and services a sort of giant balance sheet documenting everything from helicopter rentals and solar panels to eggs and body armor.
"We really didn't know what the state was buying," said Clothilde Hewlett, a former interim director of the General Services Department. "Each department was like its own silo, and that didn't bode well for transparency."
Today, the state still doesn't have a complete picture of what it spends.
"I don't think there is a reliable number," said state technology chief J. Clark Kelso. "Errors creep into all these things."
Indeed, big mistakes can occur with a missed keyboard stoke and there is no comprehensive way for General Services to find and correct them. The agency says the responsibility for accuracy rests with each state department, in what amounts to an "honor system."
"DGS clearly would not be able to tell that there is 100 percent compliance unless we monitored and double-checked each of those hundreds of thousands of entries," spokesman Bill Branch said.
There isn't anything close to 100 percent compliance, AP found while reviewing entries on thousands of contracts.
For example, computer records show in September 2004 the Conservation Department agreed to pay $32,000 to Arrow Restaurant Equipment for a coffee maker. The department has no record of such a deal.
That's because it wasn't a Conservation Department contract. It was the Sierra Conservation Center, a unit of the Department of Corrections and Rehabilitation. And it wasn't for one coffee maker, but 20 commercial-sized machines.
Once notified by AP, the errors were corrected, agency officials say.
AP previously reported the Justice Department improperly concealed scores of contracts including spending for lobbyists, consultants and law firms by labeling them "confidential." State prisons were years late providing details on billions of dollars of contracts, and still hundreds of its contracts have been held back.
The Transportation Department listed hundreds of confidential contracts for legal services, though there is no record General Services gave it permission to conceal information. General Services was not aware of the Caltrans practice until contacted by the AP.
It all adds up to a scattershot tracking system.
"It's wonderful to have a computer system but if nobody is checking what's in it, what's the use of it?" said Jamie Court of the Foundation for Taxpayer and Consumer Rights, a watchdog group.
The state now is looking at a new generation of technology that would create a kind of one-stop-shopping for financial management, supplanting all or most of the contracts database as well as a host of other state computer operations.
The expected cost: as much as $1.3 billion over a decade, a state Finance Department report says.
On the Net: California Department of General Services: http://www.dgs.ca.gov
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