- The Washington Times - Tuesday, March 26, 2002

RICHMOND The state's minority-business agency, its reputation sullied by mismanagement and ineffectiveness, has never met expectations, because political leaders have not held it accountable, says the agency's director.
Allegra F. McCullough has worked to rebuild the standing of the Department of Minority Business Enterprise among state agencies and the minority-business community since she was named to the job in August 2000.
Miss McCullough replaced Linda Byrd-Harden, forced out by the Gilmore administration because of audits that found that the agency mismanaged employee travel, payment of vendor debts, payroll and other matters.
The minority-business agency took a hit immediately after Miss McCullough took over in August 2000. The Gilmore administration gave Miss Byrd-Harden a $50,000 severance package that came out of the department's budget of $1.46 million. The current budget is $1.43 million, and the 2002 General Assembly reduced the agency's budget by $58,787 for the next two years.
The $50,000 payout to Miss Byrd-Harden had been earmarked to upgrade the department's technology and to build a Web site, Miss McCullough said. Those projects had to be delayed a year.
The Web site is important because it helps state procurement officers see which minority firms have been certified and what they do, she said.
One thing that got Miss Byrd-Harden in trouble with the Gilmore administration was allowing a state loan program for minority businesses to languish unused for nearly two years. But the problems run deeper, Miss McCullough said.
Created in 1974 to help minorities open businesses and win contracts from state government, the agency "has just been allowed to exist and not been held to the standards of other state agencies" by either Republican or Democratic administrations, she said in an interview.
If the agency were a "child and the state the parent, DMBE would be placed in protective custody and the state would be prosecuted for neglect," Miss McCullough said in a rare public criticism by a sitting agency director. "It's everyone's fault who has been in the governing process. It's everyone's fault who has not held the agency accountable."
Democratic Gov. Mark R. Warner did not disagree. He said his administration will work to increase state buying from minority businesses.
Miss McCullough said her biggest challenge has been "in restoring the public confidence and making certain they know the agency can perform as a state agency is to perform."
The department needs the power to require state agencies to reach certain goals in buying from minority companies, she said.
"One agency told me: 'Does anybody really care?'"
Minority companies defined as having at least 51 percent ownership by a minority make up about 15 percent of Virginia businesses, according to the U.S. Census Bureau. About $324 million, or 5.7 percent of the state's $5.7 billion annual procurement budget for the past fiscal year, was spent with minority companies, compared with 7.2 percent the previous year.
Of the 71,700 minority businesses in Virginia, about 2,100 have been certified by the department to do business with state government, Miss McCullough said. A certified company is one the department has determined to be a bona fide minority business.
There are a number of reasons for the small number of certified companies, she said.
Many minority firms provide services not needed by state government or don't want to do business with the state, Miss McCullough said. "Some think trying to get a contract from the state or federal government is a lot of hassle."
In any event, she said, there is no way her agency of 18 staffers could certify every minority business in Virginia.
"We need a certification program to identify the bona fide businesses as a matter of good public policy," said Phil K. Bomersheim, executive director of the council.
Failure to get the Capital Access Fund for Disadvantaged Businesses up and running in a timely fashion also doomed former Gov. James S. Gilmore III's proposed $700,000 increase in the $300,000 program during the 2000 General Assembly.
Miss McCullough said the program has made eight loans since she took over. If three loans in the pipeline are approved, the program will have exhausted its funds.


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