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Broken Record-Keeping

Charles Maldonado finds the city has a long way to go when it comes to transparency in making contracts available to the public

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ECRS (EGOV.CITYOFNO.COM/ECRS_CONVIEW), THE CITY'S OLD SYSTEM FOR POSTING CONTRACTS WAS DEVELOPED UNDER THE NAGIN ADMINISTRATION AND NEVER WORKED PROPERLY.
  • ECRS (EGOV.CITYOFNO.COM/ECRS_CONVIEW), THE CITY'S OLD SYSTEM FOR POSTING CONTRACTS WAS DEVELOPED UNDER THE NAGIN ADMINISTRATION AND NEVER WORKED PROPERLY.

Open government has been one of Mayor Mitch Landrieu's overarching themes since he took office in May 2010, and the mayor has said repeatedly that his tenure will signal a break from the city's often-opaque past, which was marked by poor record-keeping and a lack of ready access to public records.

  In many areas, the current administration has indeed made city government less impervious to public inspection. In the area of city contracts, however, a lot more work remains to be done. Even some City Council members have griped recently that they cannot find information online about current city contracts.

  Earlier this year the Landrieu administration founded the Office of Performance and Accountability (OPA), headed by Oliver Wise and overseen by Deputy Mayor Andy Kopplin. Kopplin's office has hired 10 new employees this year — and seen its budget increase by more than $3 million over last year — even as many other offices in city government saw hiring freezes. One quarter of OPA's stated mission is "Foster[ing] transparency in how City government is performing."

  Central to any transparent government is the timely, accurate and public accounting of how tax dollars are spent. City departments now report personnel and internal operating expenditures throughout the year — and in greater detail during city budget hearings.

  What don't appear in those tallies, however, are details of city contracts: how much money is spent on services and materials, who vendors are, where the money comes from, or even the terms of the contracts themselves. The state Constitution and Louisiana Public Records Act require such information to be made available. Moreover, a 2008 city ordinance requires that all professional services contracts be posted on the city's website. And a 2011 Kopplin policy memorandum requires that copies of all contracts — as well as all supporting documents — be kept in a centralized record-keeping system.

  Those laws and directives portend an intention to be transparent and open. In the area of contracts, the city has pledged to make them not only available upon request, but also easily viewable at all times via the website. A monthlong investigation by Gambit, however, found that hasn't always been the case.

  Among our findings:

  • The city has been unable to produce a comprehensive list of all currently active contracts, including values, dates and descriptions.

  • The City Attorney's Office, in theory the central record-keeper for city contracts, was unable to deliver any list, instead turning to the office of the mayor.

  • Though Gambit could identify only one missing contract that was initiated by Landrieu, we found many cases where the city's two contracting websites are missing information on currently active and recently expired contracts, including professional service contracts signed before Landrieu took office.

  • Despite promises of more openness and transparency, the Landrieu Administration has no plans to fill in the gaps we found.

Less than a week before Oct. 17, when Landrieu presented his proposed city budget for 2012, Gambit asked acting City Attorney Richard Cortizas for a list of all currently active contracts. We wanted to compare that list to what is posted on the city's two contract sites: the Ray Nagin-era electronic contract routing system (ECRS) and the newer BuySpeed portal, which the city has licensed from a vendor, Periscope Holdings.

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  Gambit sent a public records request Oct. 11 asking for a list of active contracts, including the date each was executed, the duration or term of each contract, names of vendors, names of purchasers, the name of each city department or component unit for which each contract was prepared, the dollar value of each contract and a description of the services or materials the city would receive from the contract. We received an initial response two days later, which technically complies with state law — and stands in stark contrast to the Nagin administration's record on requests for public documents.

  However, City Hall's first response merely acknowledged our request. We received a substantive response about a week later — but it still didn't include all the information we sought. In particular, we were given a 56-page list of all contracts signed by the mayor since his term began in May 2010. That list did not contain dates, dollar amounts, or in most cases descriptions of the services or materials provided. It also did not contain any information about contracts signed by Nagin that are still in effect.

  Included in that response was a comment by Assistant City Attorney Anita Curran, stating, "City contracts from approximately 2008 to present are available on the City's website. ... Please be advised, however, that the mayor's office has provided us with additional records responsive to your request."

  Landrieu's press secretary Ryan Berni initially assured us that the list represented all active contracts. We later learned — and Berni subsequently admitted — that the list included only those agreements signed by Landrieu since May 2010, some of which had already expired.

  The involvement of the mayor's office in responding to our public records request was somewhat unusual in that the City Attorney's Office typically handles all public records requests. The City Attorney's Office was budgeted $13 million and has 70 full-time employees this year. It's also the official repository of all city contracts.

  Gambit's requests for comments from Cortizas were unanswered by press time. However, Berni says centralizing procurement record-keeping in the City Attorney's Office is "certainly a goal" of the administration.

  The 56-page list provided by the city makes it difficult to cross-reference online records because it contains few details about most contracts. For vendors that appear more than once on the printed list, or for vendors who only appear once on that list but more than once on either of the websites, it's difficult if not impossible to tell which hard-copy item corresponds to which online item.

Without a centralized, up-to-date list of all its current contracts, the city may be unable to accurately, in Landrieu's words, "budget for outcomes."

  "Most everything we do in City Hall is by department," Berni explains. "The departments themselves manage their active contracts. But there's various checks and balances, checks internally, between finance and purchasing and law and other places, to ensure that people who are getting paid are getting paid on an active contract or valid procurement."

  A city audit for 2010, released in September, noted that the city's contract record keeping system wasn't centralized. It also found that city departments were not employing adequate procedures to make sure invoices were paid on time and recorded properly.

THE CITY HAS BEEN POSTING NEWLY SIGNED CONTRACTS TO ITS NEW SYSTEM, BUYSPEED (WWW.PURCHASING.CITYOFNO.COM/BSO) SINCE SEPTEMBER.
  • THE CITY HAS BEEN POSTING NEWLY SIGNED CONTRACTS TO ITS NEW SYSTEM, BUYSPEED (WWW.PURCHASING.CITYOFNO.COM/BSO) SINCE SEPTEMBER.

  The annual audit, which is required by state law, was done by the Baton Rouge accounting firm of Postlethwaite & Netterville (P&N) for the fiscal year 2010. The firm's report represents an independent evaluation of the city's financial reporting and accounting mechanisms. The report is due each year on June 30, but the city needed an extension this year, as it had for its 2009 report (due June 30, 2010).

  Along with the audit report, P&N filed two additional reports. One, the internal control in financial reporting letter, listed 13 formal findings. Those findings list the auditor's concerns about the city's bookkeeping procedures that constituted either actual noncompliance with uniform auditing standards or potentially serious weaknesses in the city's ability to maintain accurate financial records. Major problem areas included concerns about City Hall's ability to accurately report its accounts payable — which includes amounts due to vendors under current contracts.

  The firm also submitted a list of other observations — a list of problems that didn't quite rise to the level of an actual "finding," said P&N accountant Joey Richard at an Oct. 4 meeting of the City Council Budget Committee. (Richard did not respond to Gambit's request for an interview for this story.)

  The first of those observations noted that, despite the CAO's policy memorandum, the city doesn't actually have a "centralized repository" for contracts. City auditors were unable to easily track down city contracts, Richard explained to the committee.

  "I know that you show CAO policy memorandum 122(R), that the city has a centralized record-keeping system, or allegedly does, and the Law Department is responsible for bringing in every single contract and having them available in the Law Department," District B City Councilwoman Stacy Head told the accountant. "No. 1, you're saying that's not accurate, that they actually don't have every single contract, easy access. Is that fair to say?"

  "They do not," Richard said.

  "There's really no excuse in this day and age for not having them available electronically," Head said. "I was trying to find a contract the other day, and I couldn't find it. So I understand the frustration that the average constituent feels."

  Taken together, is it possible that the concerns expressed by P&N mean City Hall's checks and balances, as referenced by Berni, are inadequate?

  "I think that's a stretch," Berni says.

  Council President Jackie Clarkson, who chairs the Council Budget Committee, agreed with Head, recommending that Kopplin appear before the committee to address Head's observation "because it could affect where we're going with the budget."

  Kopplin agreed to appear, but the next Budget Committee meeting was later canceled. Budget hearings are now underway, and the council by law must adopt the 2012 city budget by Dec. 1.

Acting city attorney Richard Cortizas' office is the official repository of all city contracts, but the office was unable to produce a list of active contracts requested by Gambit. - PHOTO BY CHERYL GERBER
  • Photo by Cheryl Gerber
  • Acting city attorney Richard Cortizas' office is the official repository of all city contracts, but the office was unable to produce a list of active contracts requested by Gambit.

  There is no deadline, however, for putting all current city contracts online, as promised.

"Simpler is better for sure," says Aaron Schneider, a professor of political science at Tulane University. "I would love all of the information that you or I could ask for on a spreadsheet or some kind of an interactive database like the one we're building here."

  Schneider and Tulane law professor David Marcello have spent the past 18 months learning precisely how shrouded New Orleans' public finances can be. Their solution is the website New Orleans Satellite Government (nolasatellitegovernment.tulane.edu), which was designed as an easy-to-use repository of information about government and quasi-governmental entities.

  An example: The Audubon Area Security District had $81,000 in net assets as of its last audit, which it is required to report to the legislative auditor annually. The district generates its revenue from parcel fees not to exceed $500 a year.

  To qualify as a "satellite," an entity must have been created by local or state law, have access to public funds, require a government agent or board appointee to operate or be regulated by public operations rules.

  Meeting any of those requirements ought to have meant that information about the entity is easy to find, but simply identifying the 150 on Schneider's list took months, he says. Then Schneider and research assistant Adrienne Wheeler had to track down each satellite entity, contact them and file public information requests to gain access to their bylaws, board membership rosters and financial information.

  Many responded willingly. Some didn't. Some did but couldn't or wouldn't provide basic information on their finances, he says. Others responded only after being contacted by Mike Sherman, a colleague of Schneider's at Tulane and Landrieu's recently appointed executive counsel. Schneider was happy to have Sherman's help, but the idea of having to get a high-powered city official to shepherd his request disturbed him. "It shouldn't require someone having personal contact with someone in the administration," Schneider says.

  Even with that connection, some information is still missing.

  "I can tell you what I think," Schneider says. "I don't know that I can tell you what the city knows. I can tell you that I don't know how much is going in or out. That was one of the curiosities I've had as far as building this database."

In 2008, the Nagin Administration built its own online electronic contract routing system, dubbed ECRS. ECRS had two components, the secure "back end," where departments could draft and administer the entire contracting process from bid to mayoral signature, and the publicly accessible "front end," where citizens could view signed contracts posted online. According to Landrieu administration officials, ECRS — at least its "secure" back-end component — never functioned properly, despite its $1 million-plus price tag.

  "Unfortunately, when we performed our contracting process, the software didn't serve us well in terms of managing that new process," Kopplin said last month during his budget presentation to the New Orleans City Council.

Tulane political science professor Aaron Schneider and a colleague spent 18 months building an interactive database of information about government and quasi-government entities. Schneider says he was surprised how long it took simply to identify them.
  • Tulane political science professor Aaron Schneider and a colleague spent 18 months building an interactive database of information about government and quasi-government entities. Schneider says he was surprised how long it took simply to identify them.

  According to a report produced by the nonprofit investigative journalism site The Lens (www.thelensnola.org), the Landrieu administration was unhappy with ECRS' internal routing because "it confused city officials and vendors by generating contracts electronically before executive decisions were made, and does not match the procurement process the administration wants to put in place."

  Meanwhile, the public side of ECRS, where the city continues to post some contracts, is slow and difficult to navigate. For example, the site has 167 pages of contracts — but no search function. It's not even searchable through Google or other external search engines.

  "We recognize the difficulty and the unfriendliness of ECRS," Berni says.

  In October 2010, the city abandoned ECRS, at least the back end. Ultimately, the city replaced it with BuySpeed, its current system, which gives the Landrieu administration much more transparency. Though not quite comparable to, say, the procurement site of Austin, Texas — which is not only searchable by type of contract but also shows contractor expenditure totals on its front page — it's better than that of the City of Atlanta, which lists only vendor names, but not contract amounts, on its procurement website.

  The City of New Orleans began posting new contracts on BuySpeed in September, nearly a year after it had stopped using ECRS for internal routing. Officials in the Landrieu administration say the city continued to post signed contracts to ECRS in the interim.

  "Anything that this mayor has done ... is online," Berni says. "For the most part, I can't tell you what the previous administration was doing."

  Gambit was only able to identify one Landrieu-initiated contract that wasn't on either website — a contract for Rosenbush Claims Service. However, after reviewing 75 Landrieu-era capital and recovery projects, we identified 27 for which one or more contracts weren't posted on either ECRS or BuySpeed, including professional services. Berni says that in each case, the project was initiated and its corresponding contracts were signed by Nagin. Still, they're all either recent or ongoing. And city law requires that all professional service contracts be posted online for five years after they expire. Other contracts that were posted were incomplete. ECRS only has one partial entry — an ammendment — for the city's landfill contract with River Birch. The contract itself was, again, initiated and signed pre-Landrieu, but is still active.

  Berni says while the city is working on transferring all current ECRS content to BuySpeed, there are no plans to fill in the gaps Gambit identified, not even for current or active professional services contracts.

  Asked whether that was legal, and whether the city had gotten an opinion on it from Cortizas, Berni says, "The city attorney works for us ... . I think all in all, we obviously recognize that there's progress to be made."

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