ANNAPOLIS, Md. — A newly released audit uncovers millions of dollars spent on waste with little to no oversight, all while government employees attempted to circumvent the system.
The audit takes a deep dive into Maryland's Department of General Services (DGS) - Office of State Procurement (OSP) between November 1, 2021 and January 31, 2025.
The eMaryland Marketplace Advantage (eMMA) system was among the most troubling findings in the report.
Auditors found the system didn't function as intended, resulting in $32.5 million in wasteful spending.
After six-years the state did away with the system, canceling approximately 2,100 existing invoices after payment was already issued.
So far the State's made no attempt to recoup any of the costs.
In response, DGS said they "respectfully disagrees with the characterization that the eMMA system did not function as intended."
That, however, was just the tip of the iceberg.
According to the audit, a senior OSP official allegedly used a Minority Business Enterprise subcontractor for some eMMA work to satisfy State procurement regulations.
The problem was the subcontractor's only job was to sort through vendor invoices.
Despite the light workload, the subcontractor reportedly charged astronomical administrative fees, amounting to $3.6 million.
For example, one subcontractor's hourly rate was $82.50 but they billed OSP $170 per hour, a 106 percent markup, all under the guise of administrative fees.
"Specifically, during the period between April and December 2023 a senior OSP management employee directed the eMMA vendor to route invoices from several non-MBE subcontractors through the MBE subcontractor," the audit states. "DGS became aware of this in December 2023 and conducted an investigation4 which determined that the MBE subcontractor had not performed any work on the contract as of December 2023 other than paying these subcontractors and billing the eMMA vendor."
In January of 2024 the contract was finally terminated.
DGS, in response, called the incident "an isolated instance of noncompliance resulting from the actions of a single state actor during the early stages of the eMMA implementation."
The agency claims they were the ones who alerted auditors of the employee's actions.
That didn't stop auditors from chiding OSP for essentially abandoning quarterly procurement reviews from November 2021 to January 2025, a period for which the State spent $4.7 billion.
Auditors say they've raised concerns about the lack of transparency in four previous reports dating back to November 2013, but have yet to see corrective action.
Last but not least, another ongoing issue was flagged.
This pertaining to contracts meant for disabled individuals.
About eight of these contracts worth $16.5 million were handed out during fiscal year 2024, however auditors discovered zero hours were paid to disabled workers as intended.
For their part, OSP disagreed, saying they did monitor the organization responsible for carrying out this initiative, until such responsibilities were transferred to another State Agency.
The complete audit can be reviewed below.
