Members of the State Contracting Standards Board (SCSB) discussed possible enforcement actions against the Department of Energy and Environmental Protection (DEEP) after the department has ignored multiple requests for information related to a statutorily required audit, including removing DEEP’s ability to enter contracts.
The SCSB has been conducting audits on state agencies to ensure their contracting practices meet statutory guidelines – part of the SCSB’s responsibilities under state law – but DEEP has been ducking their requests for information related to five contracts since October of 2023, putting SCSB’s audit behind schedule.
Unlike the Auditors of Public Accounts, which is part of the legislature, the SCSB has actual enforcement abilities, including the ability to removing a state agency’s ability to contract services.
Essentially, the nuclear option, state statute says that with a two-thirds vote by the board, the SCSB may “restrict or terminate the authority of any state contracting agency to enter into any contract or procurement agreement,” if the agency has “failed to comply with statutory contracting and procurement requirements and evidenced a reckless disregard for applicable procedures and policy,” and the restriction is in the state’s best interest.
Longtime board member Sal Luciano said no one really wants to do it but they can if they have to. Luciano suggested a more incremental method of getting DEEP to comply with the audit before moving to restrict the agency’s contracting authority.
“First is the wall of shame. There’s no reason the environmental protection agency is not cooperating with us – they should be,” Luciano said during the SCSB’s August 9 meeting. “Secondly, this is not voluntary. They have to provide us that information. The statute says so and I think it’s important that we send a letter out to them.”
“Lastly, our biggest enforcement we have is the purse strings,” Luciano continued. “We could actually take over purchasing for the agency. Now, I’m sure we don’t want that, but I know the agency doesn’t want that.”
Since October of 2023, the SCSB staff and chief procurement officer have sent multiple requests to DEEP Commissioner Katie Dykes and Chief of Staff Andrew Hoskins, most of which have gone unanswered well past the SCSB’s audit deadline of June 30, 2024.
The SCSB had requested materials related to five contracts between DEEP and private vendors for repair to the Pachaug Dam, consulting, and energy efficiency services. Most of the contracts were not competitively bid, according to contracting report from the Office of Policy and Management.
“These contracts involve millions of Connecticut taxpayers’ dollars,” said Senate Republican Leader Stephen Harding, R-Brookfield, and Sen. Heather Somers, R-Groton. “The lack of a response from DEEP raises questions which need answers. Republicans will continue to press for greater transparency throughout our state government.”
The SCSB often finds itself at odds with governors and executive branch agencies given their enforcement capabilities, and the board was only recently granted funding for its full contingent of staff by the General Assembly. The Lamont administration in the past has argued the SCSB is duplicative, pointing to the Auditors of Public Accounts, which regularly audits and issues reports on state agencies, but without the ability to enforce any of their findings.
SCSB board members did discuss working with the state auditors on correcting this issue with DEEP, also positing that some state departments may feel that they are being hit twice with audits if simultaneously having to comply with both SCSB and the state auditors’ requests.
Nevertheless, DEEP was the only agency out of eleven that had not provided any information at all to the SCSB.
“Some agencies may be busy. They may think they don’t need to do it right away. Well, they do,” Luciano said. “I would suggest the wall of shame first, a strongly worded letter to them saying they don’t have a choice, they need to comply, and then the last piece of it is to point out 4e-7, which is they can’t even control their own purse strings anymore if they refuse to comply.”
**This article was updated with comment from Senators Harding and Somers**
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Good article. Very insightful.
I listened to (and watched) the board’s most recent meeting which streamed live this week on YouTube. It seems to me the kitchen has a lot of cooks. There may be a head chef in that mix, perhaps a couple sous chefs, some line cooks, a few bus boys and a dishwasher or two, but right now it’s really difficult to imagine this kitchen executing their mission effectively and with real rigor. I think it’s possible, but not without strong leadership and collective support. The Board feels insecure. It is suffering from a crippling case of low self-esteem brought on by a general lack of understanding. Let me explain.
The Auditors of Public Accounts would not waste their time with a wall of shame or some public display of verbal posturing. DEEP will obliterate the state contracting board and scatter its remains across the winds of time. And the governor will sever the trunks off another several hundred protected wetland trees in celebration of the board’s swift & utter demise. The board should either stand and act and kneel and cower. Verbal posturing with DEEP is not smart. It’s rather ill-informed and will prove quite regrettable, sort of like jumping into a wolf den wearing a sheep costume while holding a 30lb side of rare roast beef. The state contracting board audit report of DEEP for AY2023 was due June 30, 2024. That report includes the review of 5 procurement contracts for which there has been no data received and therefore full non-compliance from DEEP. That is the report. That is the audit. Data sent 10 months after the initial request is highly questionable at best. The taxpayers can draw their own conclusions based on that report. The Auditors of Public Accounts do not ask twice. They get preferential parking in the front of the agency building nearest the file cabinets. They can say things like, “Becky, Hi, my name is ____ from the APA, would you mind stepping away from your desk for the rest of the day or week or month? Well, you have to. And I need all your passcodes.” Most agencies, I think, prefer the easier softer way. Swift (remote) compliance is the preferred method on both sides. Everyone just does their job and fulfills their statutory obligations as best they can.
The board and the staff will never be “friends” with the agencies they audit. Al does not strike me as someone who is adversarial by nature. And he should not feel like he needs to be. That role is assigned to Greg Daniels. Where has he been?
The Commissioner was sent official notice of the audit back in October of 2023. The Commissioner acknowledged said notice in an email reply shortly after received all the appropriate documentation, including requests for data and a questionnaire, back in October of 2023. In light of the Commissioner’s seemingly willful non-compliance, how might the regulated community interpret the new released-based regulation draft proposal where it concerns the topic of audits?
(NEW) Sec. 22a-134tt-13. Audits
(a) Audit of Release Records
The commissioner may conduct an audit of any release record verified by an LEP or certified by a PEP to determine compliance with Chapter 445b of the Connecticut General Statutes and the RBCRs.
A full audit: (A) shall be commenced by providing notice of audit…
(i) State the reason for the full audit…(ii) Specify additional information necessary to determine if each record associated with the release is in compliance and the date by which such information shall be submitted;
If, at any time after commencing a full audit, the commissioner determines additional information is necessary to complete the audit, which may include, but shall not be limited to, responses to technical questions on the approach to remediation of the release, the commissioner shall request such information in writing, and specify a deadline for the submission of such information. If the requested information is not provided in the time required, the commissioner may determine that the remediation is not in compliance and reject one or more release records associated with such release.
Take over their contracting. Do it. Or don’t do it. Perhaps this is board’s defining moment.
Go easy.
Bryant Abbott