WEITZMAN AUDIT FINDS COUNTY'S INFO TECH DEPARTMENT FAILED TO FOLLOW PROCUREMENT RULES

Audit Also Cites Careless Recordkeeping in Period Prior to Mid-2004

In an effort to speed the upgrade of Nassau County's obsolete computer networks, the county's Department of Information Technology (DoIT) cut corners from 2002 to mid-2004, according to an audit of the Department issued today by Nassau County Comptroller Howard S. Weitzman.

The department did not always comply with state and local procurement rules; ceded oversight of some projects to a contractor that, at times, supervised its own work; underestimated project costs; and failed to account properly for goods and services purchased, Comptroller Weitzman said.

"During the audit period, the county's Department of Information Technology was in a hurry to accomplish a vital mission - to bring Nassau County computer technology into the 21st century," Comptroller Weitzman said. "In fact, much progress has been made, especially since a new commissioner with a background in the field assumed the helm in mid-2004.

"But, prior to that time, the department, in its zeal to show results, cut corners in the procurement and implementation process, hired contractors with insufficient consideration and documentation of competing offers, and delegated oversight responsibilities to a vendor. It also failed to monitor vendors' performance, paid for work without any proof it had been performed, and underestimated the cost of major projects.

"As a result of this audit and the light it has shone on past practices, it appears that the Information Technology Department has corrected or is correcting many of the deficiencies we uncovered in this report," Comptroller Weitzman said.

In one of the report's major findings, a computer consulting firm, Lincoln Computer Services, LLC, provided the department with both "pro bono" services (i.e., services for which it would not get paid) and paid services. Under the informal "pro bono" arrangement, Lincoln at various times assumed primary responsibility for managing three critical DoIT projects: migration of the county e-mail system from GroupWise to Microsoft Outlook; purchase and installation of network routing equipment; and creation of a storage network. Lincoln also developed project specifications for the network routing and storage projects. Lincoln was then awarded paid contracts on two of the projects, one a subcontract on the e-mail migration project, and the other a contract to provide new Cisco networking equipment.

"In the case of the email migration, DoIT had greatly underestimated the project cost," Comptroller Weitzman said. "Because the department failed to submit requests for change orders to the appropriate county offices, more money was never appropriated to the project. Then, when the initial $1.5 million in funds ran out, DoIT had to halt the work, even though it was only 31 percent complete. The department now estimates that another $1.5 million will be needed to complete the project as originally envisioned, including upgrading or replacing older PC's."

In the case of the network equipment, the audit found that Lincoln both advised DoIT to purchase Cisco equipment and was subsequently awarded a $2.4 million contract to provide that equipment and related services to DoIT, under a NYS Office of General Services "mini-bid" process. The audit questions the appropriateness of awarding a contract to a firm that had earlier advised on the selection of the equipment manufacturer and had helped design the specifications for the purchase. It also questions DoIT's claim that the award to Lincoln was the least expensive way to obtain Cisco equipment and related services.

Other major audit findings included:

• The department had poor controls in place over the receipt of equipment and the approval of invoices for payment. In multiple instances, invoices were paid before goods or services were received.
  
• The department has neither a working disaster recovery plan nor a "hot site" where personnel could resume critical governmental functions in the event of an emergency requiring the evacuation of county offices. A previous Comptroller's audit in September 2002 had warned about both problems.
  
• Despite the administration's creation of a Technology Steering Committee to oversee more than $27 million in approved county technology spending, the committee rarely met and, after June 2003, a small group of managers within DoIT made all spending decisions, without consulting the committee.

The complete audit report may be read and/or downloaded by clicking on the report title below.

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Corrective Action Plan (~92kB - 3 pages pdf file )

Department of Information Technology - Limited Review of the Technology Strategic Plan, Procurement Practices and Disaster Recovery Planning ( ~ 291 kb, 42 pages, pdf file)