Remember how the Republican Party says it's the party of accountability in government? And that it wants to run government like a business? Well, what's happening with the North Carolina Department of Health and Human Services is yet more proof neither of those dogs hunt. In most cases, whenever a state agency awards a personal-services contract, that department is required to provide written justification for them. But a front-page story that ran in today's (Raleigh) News & Observer reveals DHHS secretary Adona Wos has awarded a bunch of personal-services contracts in her department--and not only didn't provide justification for thembut apparently isn't willing to do so.
Department policy requires a justification memo for sole-source and personal-services contracts. Under state law, the documents would be public records.
“No justification memorandum was located by agency personnel,” DHHS attorney Kevin Howell wrote in response to a public records request.
Howell was asked several times if anyone at the department had completed the justification memos. He repeatedly gave the same reply: “No justification memorandum was located by agency personnel.”
Howell said the department’s policy did not apply to the secretary.
“The intent of the justification memorandum is for the divisions within DHHS to justify the need for personal services contracts to the Office of the Secretary,” Howell wrote. “Since these personal service contracts were for the Office of the Secretary, no such justification was needed.”
Howell failed to respond when asked to provide the policy or regulation that exempted the secretary from complying with her departmental contracting policy. The agency’s purchasing manual does not provide an exception for the Office of the Secretary.
Wos declined to be interviewed.
The N&O found that DHHS couldn't provide justification for contracts awarded to six individuals, totaling over $1.19 million. One of them went to former state auditor Les Merritt, who got a one-year contract to provide financial expertise to the state mental health department. It pays $312,000 a year, and includes two one-year renewal options. Another went to Joe Hauck, vice president of marketing and communications for New Breed Logistics, where Wos' husband is CEO. He was also a top fundraiser for Pat McCrory's gubernatorial campaign; he himself gave $6,500 during the cycle.
Although Wos claims to be exempt from her own department's rules regarding such contracts, at least one other state official is calling BS on this claim.
The rules on sole-source and personal-service contracts exist to provide a record for unusual or extraordinary spending. State Chief Purchasing Officer Sam Byassee said every personal-services contract should be accompanied by a justification memo.
“A broad reading of the purchasing and contract rules requires them to have one,” Byassee said. “Plus, you really need them for someone coming in later, such as an auditor looking for documentation that justifies the award.”
DHHS was able to provide justification for two contracts. But in what world can a private-sector company--a publicly traded one, at least--pick and choose what contracts to justify? That by itself makes this situation reek. And when you throw in that two of those contracts are to people with very close ties to McCrory, it's even more reason to raise eyebrows. This story also ran on the front page of the
Charlotte Observer. Both papers, for those who don't know, are owned by McClatchy. Which means practically the entire state from Wilmington to Morganton now knows Wos has a funny definition of accountability.
This isn't the first time that DHHS has been under the gun. Back on October, it turned out that their claims that Medicaid was broken--the reason McCrory opted not to expand it in preparation for Obamacare--were a pile of steaming lies. I'd like to see how they talk themselves out of this one.