Audit reveals Montana mishandled federal grant money
A recent audit of the Montana Department of Military Affairs found that the agency did a poor job of managing federal grant money; the investigation, led by legislative auditors, revealed that the agency had spent approximately $19 million in federal grant money over the past three years but did not monitor subcontractors;the agency is so badly organized that it could not even account for the number of active contracts that it currently had with vendors leaving the door open for potential fraud
A recent audit of the Montana Department of Military Affairs found that the agency did a poor job of managing federal grant money.The agency is so badly organized that it could not even account for the number of active contracts that it currently had with vendors.
“Despite having millions of dollars’ worth of contracts, the department does not know how many contracts in which it is currently engaged,” the auditors wrote.
The lack of a system to track contracts has left the door open for potential fraud. In one case the agency could not find any proof that a contractor had delivered any services after it had been paid $23,000.
The audit also revealed that contract managers are poorly trained and frequently violated contracting rules. For instance the Disaster and Emergency Services Division awarded a $22,500 contract to Spartan Consulting, the highest bidder, without documenting why.
The contract was to develop the state’s disaster and emergency plan and auditors are questioning whether the agency wrongly used funds from a federal grant program to pay for the project. Furthermore the agency had also incorrectly used federal money to pay some employees despite the fact that they were working on state programs.
Auditors also found that the agency had mishandled DHS money failing to award enough grants and in a time frame that exceeded federal requirements.
Auditors found so many problems with how the contracts were managed, that they vowed to investigate the issue further.
Brigadier General John Walsh of the Montana National Guard said he was disappointed by the audit and vowed to take steps to immediately improve the agency’s handling of contracts. In particular Walsh said the agency was implementing a better system to train new employees and better automation of controls.
“The auditors will help us strengthen our programs to ensure we don’t have any fraud, waste or abuse or misuse of the taxpayer dollars,” Walsh said.
“I am confident that within the next six to 12 months we will have all the recommendations implemented,” he said. “We have identified problems. We have taken corrective action where we think the problems lie.”
