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Audit slams online system for government purchases

The main issue: a big shortfall in fees the contracted vendor was expected to collect.

By JONI JAMES
Published February 10, 2005

TALLAHASSEE - The idea seemed simple: Let state agencies and local governments purchase goods over the Internet.

The brainchild of Gov. Jeb Bush's Department of Management Services, the system was created and run by a New York company, Accenture, that is paid from a 1 percent fee charged to companies that sell goods over the system.

But the state badly underestimated how much money the fee would collect, auditors found, prompting Accenture to renegotiate its contract. The company was paid $19.5-million since July 1 instead of the $32.5-million projected.

Now, a year after the state rolled out MyFloridaMarketPlace.com, a legislative auditor is expected to release a damning audit Monday of how the state handled the contract, said Sen. Nancy Argenziano, R-Dunnellon, who was briefed on the report.

The audit is the latest criticism of Bush's ambitious push to hire private companies to handle government services. DMS officials, however, characterized the audit as instructive.

"We can't minimize this problem anymore," Argenziano said Wednesday at a meeting of the Senate Government Oversight and Productivity Committee, which she chairs. "What I'm hearing is a minimization of the audit and that concerns me."

Accenture issued a statement Wednesday saying it saved the state $10-million and that the audit does not raise questions about Accenture's performance.

The shortfall in money happened partly because many vendors selling to local governments haven't paid the fee, said Lisa Hurley, deputy secretary of the Department of Management Services.

The audit is also expected to criticize the way the fees are collected. Accenture, not the state, controlled the bank account where vendors deposited payments.

Hurley agreed that should change. She said another audit confirmed that Accenture accurately accounted for each dollar deposited.

Joni James can be reached at 850 224-7263 or jjames@sptimes.com

[Last modified February 10, 2005, 00:25:06]