SPRINGFIELD, Ill. — Illinois Comptroller Susana Mendoza has suspended $5.7 million in payments on an online state-employee health insurance program, a project so botched it also prompted her to begin ordering performance reports for all large state technology contracts.
Mendoza told The Associated Press she will review the contract with Georgia-based Morneau Shepell before deciding on payment. She plans a Monday announcement on that and the new requirement that state agencies complete annual reports for the public on the progress of their information technology deals exceeding $5 million.
A state audit last week found that the previous administration’s contract with Morneau Shepell for a custom-benefit portal that was supposed to save the state $500 million a year was so sloppily executed that the program, which auditors determined could have been done in house, is costing taxpayers $10 million extra a year and still isn’t delivering the services promised.
The Department of Central Management Services, which issued the contract, has had 24 chances to dock the company for missing performance goals, but has taken no action, according to the review by Auditor General Frank Mautino. Lawmakers ordered the audit after a 2017 Associated Press report that Morneau Shepell was the only company to respond to a hasty solicitation and that the program produced payroll errors, unexplained cancellation of coverage and other difficulties.
“I’ve got to believe this is common practice, these contracts are entered into, many of which are completely unnecessary and, like this one, end up being a really bad deal for taxpayers,” Mendoza said. “The work could have been performed with existing resources and it replaced a functioning system that had been working for decades with one that is broken and is costing us more.”
The state’s check-writer has often cast a critical eye on technology work. She froze spending on the $250 million technology overhaul by former Gov. Bruce Rauner’s administration after questioning its efficacy. She called for reviewing the Rauner rollout of a $67.5 million computer improvement that temporarily canceled food stamp benefits for thousands of households. And the state Tollway pulled a $9 million contract for technology consultation after Mendoza raised a red flaf, although Tollway officials said the decision was made independently of the comptroller’s criticism.
“It’s my job to make sure that anything that touches accounting systems is done and managed correctly,” Mendoza said. “The constitution gives me that authority. Taxpayers don’t want me to just be a rubber stamp for bad contracts.”
The Democrat’s Monday announcement will detail her “IT Milestone Report” for contracts over $5 million, which will be made public. Not only will it require updates on the purchased work’s progress, but agencies will have to confirm that everyone involved in contract decision-making has completed required paperwork disclosing potential conflicts of interest. And if a contract doesn’t include a provision for ensuring minority- and women-owned business participation in the work, the agency must explain why.
The audit found that two dozen officials involved in choosing Morneau Shepell _ including from Rauner’s office, the Executive Ethics Commission and Central Management Services _ failed to file conflict-of-interest disclosures. And despite Morneau Shepell’s explanation that it routinely signed public contracts that required minority participation, CMS said it couldn’t have gotten any companies to agree to do the work if minority inclusion was enforced.
A CMS spokesman said “corrective action” had been taken to address the audit’s concerns. A Morneau Shepell spokesman did not respond to a request for comment. In a letter to the auditor general, the company said it acknowledged “the report and its contents as final.”
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