Audit finds flaw in CYFD’s plan for no-tender project
Copyright © 2022 Albuquerque Journal
A recently released independent audit blamed the former top state Department of Children, Youth and Family official for overstepping state purchasing controls by pursuing a no-call purchase multimillion-dollar bids to modernize the agency’s child welfare information system.
Had the phased procurement not been cut short with the appointment of a new CYFD Cabinet Secretary last fall, the state could also have wasted millions of dollars developing a new data system without the own, said the Jaramillo Accounting Group audit report. .
The audit findings, obtained by the Journal, provide new details of the controversial procurement that featured in allegations raised by two former senior CYFD officials who were fired last May. The couple are facing off in a whistleblower lawsuit and a state ethics complaint they were fired in part for raising questions about why the agency failed to seek bids from other vendors for the $45 million information technology project.
According to the audit, CYFD officials attempted to “tailor” Oakland, California-based supplier Binti Inc. to “any” non-competitive procurement method and at one point considered use the COVID-19 Pandemic Emergency Procurement Process.
This idea was rejected by the purchasing manager of CYFD.
“Although ultimately valid procurement ‘vehicles’ were used to hire the company without competitive bidding, there appears to be an influence that warrants further scrutiny by oversight agencies,” said the findings, which were included in CYFD’s 2021 audit report.
A spokeswoman for New Mexico Attorney General Hector Balderas said the office continues to investigate whether any state laws or rules were violated in Binti’s selection by the CYFD.
“This procurement matter is under active review and we are working with the New Mexico Office of the State Auditor and the New Mexico Department of General Services to verify compliance,” the gatekeeper said. word of the GA, Jerri Mares, last week.
Last fall, the new administration of CYFD Secretary Barbara Vigil, who replaced former Cabinet Secretary Brian Blalock, opted to tender the bulk of the unfinished project, while keeping Binti on a $220,000 contract for a software service that helps the foster family license agency.
Until then, Binti was to be awarded a four-year contract that could have totaled tens of millions of dollars to also provide intake, investigation, case management, placement and eligibility functions and payment for the new system, according to CYFD records. obtained by the Journal.
The federal government, which will contribute up to 50% of the cost of the project, is currently reviewing the state’s request for proposals to complete the new data system, which aims to improve case management, tracking and data collection. of children and families in the CYFD system.
More than a dozen other states have chosen the competitive path for the modernization effort, which is required by the federal Child and Family Administration.
But CYFD’s audit found that Blalock’s administration, which expected the project to be completed in October, was at least considering many other ways to award Binti a contract without soliciting bids from other companies.
Since December 2020, Binti has received more than $630,000 in four contracts related to the child welfare project, according to state records.
“The no-tender contracts did not consider the fair treatment of other interested suppliers and the competitive process by which other suppliers may have provided better value and products to the state. Conflicts of interest (even appearance) and non-compliance undermine public confidence in the government’s handling of taxpayers’ money,” the audit report states.
Blalock stepped down in August last year in what Governor Michelle Lujan Grisham described at the time as a “mutually agreed decision”. Blalock could not be reached for comment for this story.
But its assistant secretary Terry Locke, who left CYFD in January, disagreed with the auditor’s findings in CYFD’s formal audit response.
“The Department maintains that management did not override internal controls and that the internal controls in place worked with respect to licensing and placement purchases,” the response states.
Binti CEO Felicia Curcuru told the Journal in an email that she was pleased the audit found “valid supply vehicles were used.”
“There was nothing out of the ordinary about the way NM purchased Binti,” she wrote.
The state owns its 30-year-old child welfare data system, FACTS. The Binti contract would have required the state to pay a license fee for Binti’s software service.
“Furthermore, but for the intervention of the current Cabinet Secretary, the Department might have wasted millions of dollars on a bespoke data system of which (it) would not have retained ownership and whose modules would not not integrate with (FACTS) or the other major software system, SHARE,” the audit found.
A CYFD evaluation last October found that the state saved money by hiring Binti for the first phase of the project, which enabled CYFD workers to license adoptive parents and place children in foster homes. foster homes.
But based on this analysis, Vigil opted to continue only with Binti’s license module, the audit said.
The placement function of the system will now be included in the bidding process.
The State Finance Legislative Committee, in a budget document earlier this year, ranked the CYFD information technology project among the riskiest currently underway in the state government. Some of that risk has been mitigated, LFC said, by the plan to move to a competitive process. It is not known now when the project will be completed.
In its report, Jaramillo’s audit team wrote: ‘We have been told from various sources, and evidence corroborates, that from 2019 the new Cabinet Secretary (Brian Blalock) overstepped certain checks purchase and settled for a no-tender price to a California company.
Binti was one of 31 vendors who expressed interest in New Mexico’s CYFD Child Welfare Modernization Project in late 2018, before Blalock was hired.
But the audit found that after Blalock was nominated by Lujan Grisham and moved to New Mexico from California in early 2019, his administration focused on Binti.
Listeners addressed allegations that Binti’s owner Curcuru was friends with Blalock and/or his wife, stating that “the former secretary denied a personal relationship but admitted knowing about their work and having met them in California before to come to New Mexico to serve as secretary,” the audit said. “He was aware of their module development work in San Francisco and Los Angeles at the Children’s Rights Alliance.”
CYFD officials spent months thinking about ways to hire Binti, and at one point a shortened RFP process was mentioned.
Ultimately, in early 2020, Binti was added at CYFD’s request to a Master Purchase Agreement out of Utah that allows government entities to choose from pre-approved vendors.
Nonetheless, CYFD’s procurement manager was concerned about whether the state was getting the best bang for its buck with this method of procurement, and said the agency had failed to provide “fair and equitable treatment to everyone involved in public procurement,” according to the audit report.
The procurement officer, according to the audit report, “acknowledged, in writing, following her concerns about ethical sourcing, that there was an ‘executive directive to follow with this purchase.’ This is the essence of the overriding of management controls. »
Management’s override of controls also puts “pressure on employees,” the auditors wrote, noting the firing of CYFD’s director of public information, Cliff Gilmore, a Navy veteran who previously worked for the Department of Defense. US State and Joint Chiefs of Staff; and his wife, Debra Gilmore, an attorney who ran the CYFD Children’s Rights Office. The Gilmores left Washington State to work at CYFD in late 2020.
The State, in responding to the Gilmores’ whistleblower lawsuit and ethics complaint, argues that the actions of CYFD officials were legal, reasonable, and in good faith.