In their 2019 annual report to the General Assembly, the Connecticut Auditors of Public Accounts said that some third-party vendors are denying them access to information necessary to properly audit state and federal programs, despite being contractually obligated to do so.
The auditors noted one instance in particular in which they tried to obtain information regarding the use of the Supplemental Nutrition Assistance Program in Connecticut to “determine natural patterns in the program” and to find “unusual transactions.”
“We were unsuccessful in our attempts to obtain claims data related to the program’s payments,” the auditors wrote. “The vendor informed us that it would not provide the requested data without a contract change order and payment for production of the data. We do not believe there is any basis for the state or its agents to pay for its own data.”
The auditors note that all state contracts “currently include a provision that allows our office and the contracting state agency to monitor and audit the contract.”
The contract in question is a 7-year, $14.4 million deal between the Department of Social Services and Conduent State and Local Solutions, Inc. — formerly known as Xerox State and Local Solutions — which administers SNAP benefits through electronic benefit transfers to debit cards.
The contract with Conduent included several performance goals, which cannot be assessed by the auditors without receiving the necessary information.
But the vendor was only able to provide very short-term information and wanted to charge the state in order to compile more robust, long-term data necessary for the audit.
We do not believe there is any basis for the state or its agents to pay for its own data.The Auditors of Public Accounts
Reached for comment, DSS spokesman, David Dearborn, said the data dispute involved additional information that would have to be produced and organized by the vendor.
“The situation with the EBT vendor hinged on whether existing data were in question or data that needed to be created. I believe access to the vendor’s ‘data warehouse’ was given, but there was a cost involved in producing additional data that wasn’t readily available,” Dearborn said.
SNAP is funded entirely by the federal government but administered by the state of Connecticut through its contract with Conduent.
Conduent handles SNAP payments for several other Northeast states including New York, Massachusetts and Rhode Island and Connecticut contracted with Conduent to reduce costs.
But auditors say the problem is not limited to this one instance and that “many vendors often impede agency access to information, citing confidentiality and proprietary concerns.”
In testimony before the Government Administration and Elections Committee, State Auditors Robert J. Kane and John Geragosian noted that “Four Attorney General formal opinions have upheld our office’s access to all agency records and information.”
Their testimony was submitted in support of a bill that would implement the auditors’ 2018 recommendations. That bill passed unanimously in the Senate but was never taken up by the House of Representatives.
Several of their recommendations found their way into the budget, however, including a provision that would require the Office of Policy and Management to provide reasons why the state’s competitive bidding process is waived for certain contracts.
But reforming state law to give easier and unfettered access by auditors to third-party vendors was not passed.
“Without complete and accurate payment data, the agency has no way to determine whether the vendor actually met its performance goals,” the auditors testified. Without the auditors’ review, the state must rely on reports produced by the contractor to verify their performance.
The auditors recommended state statutes and contract language be “strengthened to grant state agencies and our office unfettered access to the state’s data and contract-related information.”