State Controlling Board Shows Little Zest For Control

Akron Beacon Journal - April 21, 2003

by Zach Schiller, in The Akron Beacon Journal

CLEVELAND -The writer is research director at Policy Matters Ohio, a nonprofit research institute. His recent report, Too Much Power, Too Little Oversight: Ohio’s State Controlling Board, is available at here.

Ask most Ohioans about it, and they’ll probably scratch their heads in puzzlement. Yet if relatively unknown, the State Controlling Board is a powerful force in the Statehouse, affecting most citizens with its decisions. During budget squeezes such as we are experiencing now, its role grows even larger.

Every two weeks, its seven members — six legislators and one budget department official — meet and decide how the state will spend millions of dollars. Most state agencies come before the board at one time or another with requests, from contracts to design bridges and manage construction projects to aid for schools and colleges to grants and loans for companies aimed at economic development.

The trouble is, this oversight board isn’t doing enough oversight. The problem is compounded by the board taking on legislative powers that should be left to the legislature itself.

Though the Republican majority on the board indicated recently that it was tightening up on its review, the board approved seven out of every 10 requests it received last year without any discussion. Some of these items deserved questioning.

For instance, the board approved a contract for radiology services at a state prison last year when there was only one bidder. Even as Connecticut-based Stanley Works was gaining national notoriety last spring for moving its headquarters — on paper — to the Caribbean to avoid paying U.S. taxes, the Controlling Board was accepting a state Department of Development request to spend $100,000 supporting the relocation of a company facility within the Cleveland metropolitan area. The board approved the money without question.

When board members do ask questions, they sometimes go on and approve requests despite inadequate answers. During 2002, the board actually voted down just one request of the 1,665 it considered. Another 52 were deferred or withdrawn, often before the board considered them. Most of these were later approved.

The board may transfer funds from one agency program to another, or allow agencies to spend money they accumulate from fees and other sources. This concentrates in the hands of seven people authority that otherwise would be vested in the legislature. The board grants waivers of competitive selection for major contracts that do not go through the standard bidding process of the state Department of Administrative Services.

Sometimes, there is good reason for this: The agency employing the contractor may have used its own competitive selection process, or the product may only be available from one vendor. With dozens of contracts approved last year, however, it is unclear whether they were competitively bid or not. The result: millions of dollars in state spending without proper accountability.

The board approved 56 contracts last year for outside psychiatrists at the Department of Rehabilitation and Correction for a total of more than $8 million. In a number of instances, these contractors were not hired through a competitive process to begin with, and have had contracts renewed for years since then.

Given the pay scale for psychiatrists who are state employees, it also seems clear that the state would save money if these jobs were brought back in-house.

Some of the board’s approvals of competitive waivers strain the imagination. Last month, it approved a $450,000 increase in a contract with a blue-chip, Washington, D.C., law firm to help craft the details of proposed cuts in Medicaid. The firm will be paid $300 an hour, more than double the usual state rate for outside counsel. The board apparently overlooked the irony of the state hiring a law firm at such a rate to help eliminate health insurance for 50,000 Ohioans.

Tracking the board’s actions closely is difficult. The board should make sure that public access to its decision-making is broadened, starting with electronic access in advance of its meetings to the requests that it considers.

For its part, the General Assembly should review the board’s powers and eliminate those that more properly belong to legislature. It should require that competitive waivers be allowed only when shown to be absolutely necessary, and insist that agencies requesting them provide an explanation of what process was used to award each contract. It also should establish strict criteria governing unbid consulting contracts, and require cost comparisons before allowing public services to be provided by private vendors.

In short, more controls are needed for the State Controlling Board.


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