DOVER — An investigation by the state auditor has substantiated — in part — most of the allegations of alleged procurement and travel policy procedure violations involving the Developmental Disabilities Council.

An unidentified DDC director was accused in six of the nine allegations that were partially or fully “verified by competent evidence,” a June 29 report by Auditor of Accounts Tom Wagner stated.

Those included “issuing contracts without Requests For Proposals or competitive bidding” and “issuing contracts to a vendor who was not doing the work it was contracted for.”

The report said the unnamed director was placed on administrative leave in September 2017. He returned to work in January 2018 as the investigation was ongoing.

Delaware State News’ requests to the auditor, DDC and the Delaware Department of Safety and Homeland Security for the director’s name and further information or comment if available were unsuccessful.

The auditor’s report did not include any suggested corrective action.

The DDC is a state agency governed by the Office of the Secretary of the DSHS and states its mission online as addressing “the unmet needs of people with developmental disabilities through system-wide advocacy, planning and demonstration projects…” and “to promote and embrace inclusion, equality and empowerment.”

In the report, Mr. Wagner said his office received complaints in October 2017, which prompted investigation into fiscal years ending June 30 in 2015, 2016, and 2017. The source of the initial complaints was not disclosed.

The auditor’s findings also maintained:

• Contracts did not include a 40 percent match requirement.

• Contractors did not submit required reports by the specified deadline.

• Contracts were issued for purposes that did not align with a goal or objective of the State Plan.

• Contracts were not signed by the Council Chair.

Travel violations identified in the report involved:

• The council incurred $365 in travel related expenses above the cost of using Fleet services.

• Travel requests did not have the proper approvals.

• Travelers did not follow Council reporting requirements upon returning from the trip.

“In addition, AOA found that the Director assisted one contractor with applying for non-profit status and filing incorporation documents,” according to the findings.

“This contractor was awarded one contract in Fiscal Year 2016, 8 months after their 501(c)(3) status was obtained.”

The auditor’s full report is online at auditor.delaware.gov, The DDC’s website address is ddc.delaware.gov.

A DDC agenda posted for a Wednesday night meeting listed the Auditor of Account’s report at the first item under new business.

Reviewing contracts

The auditor’s office said it “reviewed 23 professional services contracts, 18 out-of-state trips taken by various Council members and staff, and various travel-related PCard transactions.”

Of four contracts meeting the $50,000 minimum for a formal RFP process, the auditor said, three were awarded “without proper DDC evaluation and approval of proposals.”

An allegation that the director assisted friends complete paperwork to establish a non-profit eligible to receive contracts was only partially substantiated, the auditor said, because it could not be proven “that the intent was to help the group incorporate specifically for the purpose of obtaining contracts from DDC …”

Another partially substantiated allegation was that “The Director would show preferential treatment by some contractors by waiving the match requirement.” The auditor reviewed requirements that contractors must match 40 percent of awarded federal funds.

“Out of 23 contracts reviewed, 8 contracts had a match requirement of less than 40 percent, and 9 contracts had a match requirement of more than 40 percent,” the auditor’s investigation concluded.

“AOA cannot prove the intent was to show preferential treatment as claimed in the allegation. In addition, the Council did not require contractors to submit itemized receipts or proof of how cash or in-kind matches were applied.”

In four contracts, the auditor said evidence was found “where the contractor was paid the amount reported as a match on its expenditure reimbursement logs.

“Council staff explained to AOA that these contracts are set up like this because they require the contractor to generate funds through registration fees, advertising fees, etc. Rather than retaining the funds are their payment for services rendered, the revenue generated by these activities is submitted to the Council which then pays the contractor.

“AOA did not perform any procedures to verify the appropriateness of how this match is handled.”

An allegation that Council document are often signed via a signature stamp was substantiated by the auditor.

“Of 23 contracts examined, 17 contained the Council Chair’s signature stamp, 5 had live signatures, and one did not have the Chair’s signature,” according to the investigation.

“The signature stamp was kept in an unlocked drawer in a DDC staff member’s office. All DDC staff were aware of the stamp’s location if they needed access to it.

“Since the signature stamp was not adequately secured, it is not possible to determine if the approval was administered by the correct authorized person.”

The auditor also investigated contractor expenditure reports to be submitted monthly, within 15 days after the end of each month.

“Two out of 21 contracts failed to submit the expenditure reports at all, and 11 out of 21 contracts submitted expenditure reports after the deadline,” the investigation concluded.

“Nineteen out of 21 contracts did not contain adequate support to show how the funds were spent.”

An 8.6 percent salary increase received by the director on July 1, 2014 was scrutinized and an allegation that the Council was used to obtain it were unsubstantiated.

“This increase was a result of the Council submitting critical reclassification paperwork to DSHS and OMB for approval,” the auditor concluded.

“This allegation is unsubstantiated because the Council submitted the necessary paperwork and obtained proper approval from OMB for the pay rate change. DDC did not provide evidence to demonstrate whether the Director or Council initiated the critical reclassification.”

Travel-related transactions

The auditor’s review of 28 travel-related transactions found:

• One transaction totaling $135 was for a private town car service used from the airport. A shared business shuttle was available and would have been a more economical mode of transportation.

• Four transactions totaling $516 were for several individuals traveling to the same place at the same time, using separate car services. Only two of the four transactions should have been allowable because the individuals could have carpooled.

• Three separate town cars were used to transport seven individuals attending the same conference to and from the Philadelphia International Airport. AOA confirmed with the vendor that none of the reservations required handicap-specific accommodations, indicating that the group could have used a Fleet vehicle to travel.

• There were also two additional trips taken by the Director where airport shuttles were used to transport her from her home to the airport and back; however, a Fleet car would have been the most economical mode of transportation in these instances. The transactions for the aforementioned trips totaled $787, but using Fleet vehicles would have saved the State $365.

Also, according to the auditor “Of the 18 trips attended by Council members, 15 were not approved by the Council in meeting minutes.” Additionally, “Of the 15 events attended by Council or Committee members, nine failed to present conference materials and a report to the Council after the event. Six met the reporting requirement.”

According to the investigation, the DDC received a combined $1.456,817 in federal grants in FYs 2015 to 2017 and $20,000 annually from the State’s budget bill during the same span.

The auditor included information on the Council’s state mission and that it “funds a variety of projects and programs that focus on the areas of self-advocacy, inter-agency collaboration health care, education, and early intervention.

“The services for these projects and programs are acquired through professional services contracts awarded by the Council.”

DDC bylaws indicate that the Council consists of 21 to 40 members appointed by the Governor.