Purpose

To determine the extent of implementation of the eight recommendations included in our initial audit report, Procurement and Contracting Practices (Report 2010-S-71).

Background

In our initial audit report, which was issued on February 28, 2012, our objective was to determine whether the procurement and contracting practices of the New York State Office of Information Technology Services (ITS), formerly known as the New York State Office for Technology, resulted in the best value for taxpayers, consistent with applicable legal, regulatory and ethical requirements. We found a culture, emanating from the highest levels of the agency, that disregarded the New York State Finance Law, the State's Procurement Guidelines and the agency's own procurement policies. This did not result in the best value for the taxpayers, but instead led to a waste of substantial public resources. Moreover, in several notable instances, transgressions appeared to have been motivated by personal gain and may have violated the ethics standards contained in the New York State Public Officers Law.

ITS plays a significant strategic and technology procurement role in State government. ITS is responsible for providing centralized information technology services to the State and its governmental entities. ITS also sets statewide technology policy for all State government agencies, assists agencies with large technology procurements and monitors all large technology expenditures in the State, seeking efficiencies, lower costs, and innovative solutions. With an annual budget of about $434 million, the agency serves as one of the State's principal purchasers of technology. In this regard, it should be noted that between July 2012 and September 2012, ITS transferred its procurement function to the Office of General Services (OGS). ITS and OGS are actively working together to finalize each other's roles in the procurement process.

Key Finding

ITS officials have made some progress and, in working with OGS, continue to make progress in addressing the problems we identified in the initial audit. Of the eight prior audit recommendations, one was implemented and seven were partially implemented.

Key Recommendation

Officials were asked to respond within 30 days of the issuance of this follow-up review, indicating actions planned to address the unresolved issues discussed in this report.

Other Related Audit/Report of Interest

Office for Technology: Procurement and Contracting Practices (2010-S-71)