Nearly $10 million worth of contracts between the Office of Early Childhood (OEC) and outside vendors were finally signed by the state agency up to eight months after the contract’s execution date due to a lengthy, bureaucratic process, according to a report by the state auditors, which also found several other contracting issues within the OEC.
Sixteen contracts totaling $9.7 million were signed between one and eight months after the contract execution date, which, “increased risk of noncompliance,” according to the auditors. However, the OEC, in their response, described a lengthy process through which the OEC can finally sign a contract.
According to the OEC, under a 2015 memorandum of understanding, OEC contracts first go to the Central Contracting Unit of the Department of Mental Health and Addiction Services (DMHAS), before heading over to the Attorney General’s Office for review and execution. That process, combined with an increasing number of contracts and staffing problems, contributed to the delay.
“As the number of OEC contracts increased over time, the staffing from CCU remained the same and challenges with timely execution surfaced,” the OEC wrote in its response. “Additionally, the structure established through the MOU made it difficult to fully manage the execution of OEC contracts, as the staff responsible for the contracting functions did not report to the OEC Grants and Contracts Unit Director.”
The OEC has since taken over contracting itself through the Grants and Contract Unit Director and is unwinding the 2015 MOU due to “staffing changes” at DMHAS since 2023.
Auditors found the office also did not properly monitor the subcontracting activities of one contractor with a $12.5 million contract. Additionally, another contractor with a $1 million contract did not obtain written bids for three subcontractors, failed to sign a $50,000 contract, and the agency did not obtain financial reports for four contracts totaling $1.2 million.
Failure to monitor subcontractors can result in increased risk of waste fraud and abuse, according to the audit. The OEC indicated these issues would be corrected with their new director of grants and contracts and indicated the audit findings had to do with OEC’s contract with the United Way.
Lastly, the agency spent nearly $900,000 on “temporary services without the appropriate cost-benefit analysis to determine the potential cost savings and other statutory provisions,” and “did not determine its projected costs or whether savings were achievable through privatization contracts,” the auditors wrote.
The OEC indicated they had “misinterpreted” a statute, believing that it only applied to “large scale privatization contracts and not temporary workers hired through a staffing agency via the Department of Administrative Services master contract process.”
While the agency said it will update its practices, it also indicated that the “inordinate amount of time it often takes to hire staff, OEC is often left with no other viable option but to engage temporary workers.”
Aside from the Auditors of Public Accounts, which issued the report, the State Contracting Standards Board, which has the power to revoke state agency contracting powers, has long recommended the creation of a central procurement office with the expertise and experience to manage Connecticut’s contracts in line with statutory regulations.
OEC is far from the only agency to have run afoul of state contracting standards; numerous agencies have been cited for privatization of work, awarding contracts without competitive bidding, and state contractors awarding subcontracts to themselves. During a public hearing on a bill to authorize a study of the state’s contracting processes, Connecticut’s nonprofit groups have complained that the state’s contracting inefficiencies have led to a delay in services, in testimony submitted to the legislature.
Previous studies regarding Connecticut’s state employee workforce have found the state’s hiring practices result in long delays and understaffing, particularly following a 2022 “silver tsunami,” during which the number of state employee retirements doubled due to contractual retirement changes. Gov. Ned Lamont commissioned the Boston Consulting Group to report on possible efficiencies from the retirement wave, recommended streamlining the state’s hiring process, noting that it can take five to six months to complete.
OEC Commissioner and former legislator Beth Bye announced her retirement stating the OEC has made “Connecticut the most family friendly state,” by expanding early education and launching universal home visiting.
“The achievements Connecticut has made to improve the wages of early educators and make child care more affordable for families happened only because of decades of work by advocates, legislators, philanthropy, and families,” Bye said in a press release. “This collaborative work is a model for other states and the nation.”
Bye will be succeeded by OEC Deputy Commissioner Elena Trueworthy.
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