- Associated Press - Monday, February 9, 2015

RALEIGH, N.C. (AP) - The General Assembly should ban personal services contracts from state government, a legislative watchdog agency recommended Monday, saying lax oversight has caused the agreements with temporary workers to be “misused and abused.”

More than 14,600 such personal service contracts were in force across agencies during the 2012-13 fiscal year, valued at $58 million, the legislature’s Program Evaluation Division wrote in a report. State rules don’t require scrutiny of these contracts by the state personnel office or other agencies before they’re approved and carried out.

The study’s authors identified 255 personal services contractors between mid-2009 and mid-2013 being paid an hourly rate that if annualized would have met or exceeded the average salary of the highest paid state executives in 2013, or $164,150. Gov. Pat McCrory makes $142,265.

The division also found executive branch agencies routinely failed to obtain required state agency approval for information technology personal services contracts during 2012-13. And none of the non-IT consultant contracts the study authors sampled for the same year were approved by the governor and the state purchase and contract office as required by law.

Traditional contracts for goods and services of more than $25,000 are usually subject to review and approval by purchasing or IT agencies. Agencies like to use personal services contracts to hire temporary workers for specific tasks quickly.

“Agencies are susceptible to misusing personal services contracts,” study lead author Meg Kunde told a legislative oversight committee.

All agencies must do is report to the state budget office personal service contracts of more than $25,000, of which there were 462 during 2012-13 - a transition year between Democratic Gov. Beverly Perdue and McCrory, a Republican.

The report also recommended the legislature require the state Office of Information Technology Services to review and approve IT service contracts, as well as requiring all executive branch agencies to seek temporary work help through the Office of State Human Resources. McCrory signed a February 2013 executive order mandating his Cabinet agencies to use the personnel office for supplemental staff.

In a letter accompanying the report, McCrory administration officials said they agreed with most recommendations, but not an outright prohibition. Personal services contracts may be “a viable option to meet the state’s ability to respond to immediate, short-term and unique service needs,” wrote the officials, including state human resources Director Neal Alexander.

McCrory’s Department of Health and Human Services has been criticized for personal services contracts.

One went to Joe Hauck, hired in early 2013 by department Secretary Dr. Aldona Wos. Hauck, previously working as an executive at a company run by Wos’ husband, received $310,000 in less than 11 months of work. The agency defended the hiring, and said last year Hauck’s work would save the embattled department $1.25 million annually.

The report found the Department of Public Safety and Administrative Office of the Courts among the most frequent users of the contracts.

Committee members were split on the recommendations and planned more discussions. Any changes would have to be approved by the House and Senate in a bill.

Rep. Nelson Dollar, R-Wake and a former Commerce Department personnel director, said the state personnel office arm for temporary workers would be “wholly inadequate for the enterprises that we are talking about.” But Sen. Ralph Hise, R-Mitchell, said it’s clear agencies have bypassed the rules and a “response from the General Assembly is necessary.”


Copyright © 2018 The Washington Times, LLC.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide