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Minority contract monitoring called poor

Thursday, September 21, 2000

By Bill Moushey, Post-Gazette Staff Writer

The Allegheny County agency that certifies and monitors minority- and women-owned businesses has been a study in shoddy systems and non-existent oversight, even though city and county agencies spent almost a million dollars in the last year to watch over it.

Those were among the findings of a limited audit of the Allegheny Department of Minority, Women and Disadvantaged Business Enterprise office released yesterday by Allegheny County Controller Dan Onorato.

"This system has been operating the same way for so long with a minimal effort on the part of government because there was no pressure from anyone to change it," Onorato said. "That is exactly why we have pass-through companies and other problems with the program."

Onorato said auditors studied a sampling of 25 files provided to the office by businesses seeking to be certified to participate in government contracts as minority- and women-owned firms.

He said the auditors began looking at the files after hearing complaints stemming from a three-month investigation by the Pittsburgh Post-Gazette into questionable use of such firms on the construction of the basebell and football stadiums on the North Shore and the pending work on the David L. Lawrence Convention Center.

The Post-Gazette found the Pittsburgh Sports & Exhibition Authority allowed prime contractors to award work to minority and female brokers and suppliers whose main function was to simply transfer work to firms managed by white men.

The county controller affirmed the newspaper findings.

In his sample, Onorato found 22, or 88 percent, certification applications were incomplete; 12, or 48 percent, of them had needed materials missing from files; 12, or 32 percent, had incomplete in-office audits; and eight, or 24 percent, had incomplete on-site reviews. Nonetheless, they were approved and allowed to participate.

That led him to suggest the entire certification system and the controls used to operate it should be examined and overhauled.

He also suggested the certification process takes too long and that the agency's appeals board, which has had only two of its five seats filled much of the past two years, should be changed and enlarged so that the appearances of bias that Onorato found can be reduced.

"We need to build integrity back into the process so that people engaging in it have confidence; we need to rebuild confidence in it," he said.

Onorato also said that because several different entities in the county perform the certifications, it has caused confusion.

"We need to have one centralized place. Why not put it under one roof, then we could funnel some of the money into monitoring and still save some?" he said.

He said monitoring is the most serious problem with the program.

He pointed out that $929,475 was spent by the Sports and Exhibition Authority, Allegheny County Sanitary Authority, the Port Authority of Allegheny County and the city during the last year and a half to ensure certified minority- and women-owned businesses actually did the work they accepted.

Onorato said the audit produced little or no evidence that specific checks were made to see if minorities and women were in control of day-to-day operations on the various jobs.

The sports authority spent $60,000 and the Pirates and Steelers $100,000 each for a consultant to monitor the firms, but they have not received a written report on the process.

Allegheny County spent $265,129, the Port Authority, $105,000, and the City of Pittsburgh, $166,322, all on work that was done internally. Alcosan spent $133,024 on such work.

"My opinion of the follow-up is that it's pretty much non-existent....follow-up doesn't exist," he said.

While the sports authority has committees that monitor minority participation and recently hired a consultant to examine the results, neither it nor other county departments examine such things as certified payrolls and tax records, insurance records, or pension and benefit records of union employees that prove disadvantaged businesses are actually at work on these jobs.

"We need to be doing field work to actually follow up to see who is taking care of day-to-day operations," he said. In the past, on-site visits were done by appointment, but Onorato said they should be unannounced.

While Onorato condemned the long-standing problems in that department, he praised Cameil D. Williams, the agency's new director, for taking a action on the agency's problems.

While Williams, director of the program since April, did not respond yesterday to questions about the audit, she did respond in a letter sent to Onorato. She said the actual operation of the certification process was brought in-house in May after a contract with Pittsburgh Attorney Carl Brown Jr. was terminated.

She said the agency staff already has started going through every file in her office. Formal requests are sent to the companies when staffers find that something is missing.

Williams told the controller that if the firms do not respond quickly, their certification will be terminated.

As for the pass-through issues, she said "the department is taking measures to strengthen relationships and develop effective policy to ensure inclusion of [minority- and women-owned firms] in meaningful business opportunities throughout Allegheny County," according to her letter.

She said every department director in the county has been asked to participate in this endeavor.

As for the issue of duplication of services, she said she is studying the issue and will make recommendations to Allegheny County Chief Executive Jim Roddey in the near future. In June, Roddey asked the FBI to investigate problems associated with the program.

Yesterday, Margaret Philbin, Roddey's spokeswoman, said Onorato's report affirmed Roddey's "decision to appoint a qualified director to oversee the department, confirms the problems Cameil encountered upon her arrival, and supports the corrective actions she is taking to revamp operations."

Brown, displaced as the certification specialist for Allegheny County shortly after Williams' appointment, said the files he turned over to Allegheny County after his contract was terminated in May were complete.

He challenged virtually every element of Onorato's audit, suggesting it was less than thorough. He said he followed every policy and rule given to him, and actually made numerous suggestions about monitoring and compliance over the years that he said went unheeded.

He said the City of Pittsburgh, where Onorato served as a city councilman before his election to the controller's seat in 1999, has done less than the county in issuing tough guidelines to make sure the various programs works.

"I wish he had been more active when he was on City Council and agreed to all of these practices," Brown said.

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