In response to a call to its waste, fraud and abuse hotline, the Office of Legislative Audits investigated complaints about contracting at the Maryland Transit Administration, which runs the buses, subway and light rail line in the Baltimore region.
“Our review disclosed that MTA included language in certain contracts that allowed its employees to circumvent State procurement regulations by directing the contractors to use specific vendors as subcontractors,” chief legislative auditor Gregory Hook said in a letter to lawmakers. “The MTA management employee used this capability to direct work to specific vendors as subcontractors including one vendor with which the management employee had less than an arm’s-length relationship (related vendor). The related vendor was paid $3 million for the subcontracted work. Due to the questionable nature of certain of this activity, we referred this matter to the Office of the Attorney General – Criminal Division. We also identified possible violations of State ethics law that may require referral to the State Ethics Commission.”
“Our review also identified questionable procurement and contract monitoring practices, which may have limited competition and precluded effective monitoring of contracts and related payments,” Hook said. Contracts were issued without proper approval, and payments were made without invoices to back up the work.
Four contracts for snow and ice removal totaling $6.2 were issued to a contractor that the project manager had a relationship with.
It is standard practice in the public audit reports not to name specific individuals.
In response to the audit, Secretary of Transportation Pete Rahn said, “We take the audit findings very seriously. We have resolved many areas of concern and are actively working towards compliance with the remaining report recommendations in a manner outlined in the responses.”
The agency said the unnamed management employee was removed as project manager on the contracts and is under investigation by the Attorney General’s Office.