Investigation Finds DHHS Maintenance Organization Lacks


Leslie W. Merritt, Jr., CPA, CFP
State Auditor / STATE OF NORTH CAROLINA
Office of the State Auditor / 2 S. Salisbury Street
20601 Mail Service Center
Raleigh, NC 27699-0601
Telephone: (919) 807-7500
Fax: (919) 807-7647
Internet http://www.ncauditor.net

FOR IMMEDIATE RELEASE

For Additional Information Contact: Chris Mears, Director of Public Affairs

Office: (919) 807-7566

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Investigation Finds DHHS’ Maintenance Organization Lacks

Competitive Bidding and Improper Contract Documentation

RALEIGH, NC – July 31, 2008

Today, State Auditor Leslie Merritt released an investigative letter on the Western Regional Maintenance (WRM) organization under DHHS. The investigation found that WRM failed to comply with State construction bidding rules, relied on improper contract documentation, purchased items outside of the State term contract and that payment timeliness could not be verified.

Investigators discovered the violation of bidding rules and the improper contract documentation when they reviewed 20 invoices valued at over $30,000 each. 10 of the 20 invoices did not have supporting documentation to indicate three solicited bids, and 7 of the 20 invoices had missing, improper or partial contracts.

“The State has established competitive bidding and contracting guidelines to ensure that taxpayer money is used most efficiently and effectively. This process allows taxpayers to get the biggest bang for their buck and the assurance that no self-dealing is taking place,” said State Auditor Leslie Merritt.

WRM is a consolidation of three formerly separate maintenance organizations all of which are located in Morganton, NC, and report to the DHHS Property and Construction Office in Raleigh. This consolidation was directed by the General Assembly as an effort to increase government efficiency in 2003.

“These findings aside, testimony was provided that considerable improvements in preventative maintenance made after DHHS’ consolidation,” said Auditor Merritt.

This investigative letter resulted from a tip to the State Auditor’s Office. To report fraud, waste or abuse of State government resources, call the State Auditor’s Hotline at 1-800-730-TIPS.

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