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OIG Report: Improper contract, vehicle lease leads to 'excessive and unnecessary' costs to the city

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Posted at 4:32 PM, Jun 17, 2020
and last updated 2020-06-17 16:32:28-04

BALTIMORE — An improper contract for a person to serve in a Senior Manager role to the city and a new vehicle lease resulted in "excessive and unnecessary" costs to the City.

The Office of the Inspector General (OIG) received a complaint alleging Executive Management of the Mayor’s Office of Emergency Management (MOEM) improperly procured a service contract for an individual to serve as a contractor to the City in a Senior Management role (Senior Manager).

It was also alleged they improperly executed a vehicle lease for use by the Senior Manager, resulting in "excessive and unnecessary" costs to the city.

Additionally, Executive Management approved the Senior Manager to work overtime hours that were not authorized by the service contract, resulting in OT pay for the Senior Manager.

During the investigation, the OIG discovered the Senior Manager excessively used their assigned City vehicle, mobile phone and computer equipment for personal use and in violation of City policies.

The OIG report says when the Senior Manager first came to MOEM, their assigned take-home emergency vehicle was leased at $498 per month for a 24-month period, with an overall cost of $11,952.

The OIG learned that in September 2018, after the Senior Manager was involved in a serious car accident in their take-home emergency vehicle while off duty, Executive Management approved the lease of a brand new take-home emergency vehicle.

As a result of the Senior Manager’s accident, the previous leased vehicle sustained heavy damage requiring over $12,000 in repairs, which was paid by the City.

In addition to that cost, in accordance with the vehicle lease terms, an additional $7,592 payment was due to the Lessor for the accident damage and excessive mileage when the vehicle was returned.

That resulted in more than $20,000 in additional costs to the City.

The new take-home vehicle was customized directly from the factory, with a lease rate of $977 per month for a 24-month period with an overall cost of $22,872.

By comparison, the Senior Manager’s new take-home vehicle was $479 per month more than the previous lease. This resulted in an additional $11,496 expense to the City over the life of the new vehicle lease agreement.

The new leased vehicle customization included, at a $695 additional cost, an enhanced driver alert package that included power-adjustable pedals, forward collision alert, Intellibeam™ headlamps, low speed forward automatic braking, lane keep assist with lane departure warning, and safety alert driver seat.

Executive Management’s failure to ensure the Senior Manager’s contract was followed, and the additional cost of the new leased vehicle, resulted in a total added expense of more than $53,000 to the City.

In December 2018, Executive Management drafted and presented a contract to the Board of Estimates (BOE) for the Senior Manager to serve as a contract employee until their February 2019 retirement from the BCFD.

The contract was for a one-year term, with each additional year of service requiring a new contract.

However, the contract did not begin until April 2019. Executive Management failed to modify and resubmit the contract to the BOE.

The initial contract was approved by BOE in January 2019 and clearly states the Senior Management would earn $105,000 for the duration of the contract, without any additional benefits and/or financial compensations.

The OIG learned that between April 1, 2019 and March 10, 2020 Executive Management authorized 560.50 hours of overtime (OT) resulting in $42,441.06 in OT pay for the Senior Manager.

They also learned that rather than submitting a new service contract for the Senior Manager prior to the expiration of the original contract, Executive Management allowed the Senior Manager to continue to work for four months after the original contract ended.

Since the investigation, OEM has made the following changes within the office:

  • The MOEM employees who are the subject of this report are no longer employed by the City of Baltimore
  • OEM is currently reviewing all existing personnel contracts and leases to ensure they are reasonable and in line with city policies
  • OEM will be distributing and reviewing copies of the City's Administrative Manual as well as the Fire Department's Manual of Procedure