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Puget Sound Partnership funds misspent

The first audit of a new state agency dedicated to cleaning
up Puget Sound has found cost overruns, failure to follow the law in awarding
no-bid contracts, and wrongful use of state money on gifts.

JORDAN SCHRADER; Staff writer

JORDAN SCHRADER; Staff writer

Published: May 14, 2010 at 8:38 a.m.
PDT — Updated: May
14, 2010 at 6:32 a.m. PDT

0
comments

The first audit of a new state agency dedicated to cleaning up Puget Sound
has found cost overruns, failure to follow the law in awarding no-bid contracts,
and wrongful use of state money on gifts.

“Public funds set aside for the restoration of Puget Sound were improperly
spent,” State Auditor Brian Sonntag’s office wrote.

The Puget Sound Partnership says it has taken steps to make sure future
spending follows the law. But no one at the agency has faced discipline for
wrongful use of money, a spokesman said.

Legislators created the partnership in 2007 with a mission to restore Puget
Sound’s health by 2020. Most of its staff of 36, now split between Olympia and
Seattle, is scheduled to move this summer into the new Center for Urban Waters
building on Tacoma’s Thea Foss Waterway.

Among auditors’ findings:

In an apparent attempt to circumvent competitive bidding requirements for
contracts of $20,000 or more, the partnership sought to pay law firm K&L
Gates $19,999. After additions to the contract and extra payments that exceeded
that figure, the firm was paid $51,498.

The agency didn’t seek other suppliers when it spent $11,897 on monogrammed
jackets and fleece vests for its staff and others, including federal employees
and state legislators. State law allows recognition awards only for state
employees.

In another set of recognition awards, contractors, representatives of the
Canadian government and Gov. Chris Gregoire received mahogany gift boxes
containing bottles of sparkling apple cider. The 20 personalized, engraved boxes
cost $687.

A purchase of 5,000 tubes of lip balm for promotional giveaways, at a cost of
$3,650, also lacked a competitive process. A third of the lip balm remains in
the state’s possession.

The agency skipped the normal processes for buying computer equipment and
spent $42,000 on Apple Computer products, which aren’t compatible with state
information systems.

‘THROES OF DEVELOPING’

Partnership officials attributed the questionable spending to start-up
struggles at a new agency that was given a year and a half to write an agenda
for the next decade of work protecting Puget Sound from pollution.

“We were caught up in the throes of developing the Action Agenda, and there
was a lot of pressure to get all that work done,” spokesman Frank Mendizabal
said. He said no one was fired over the problems.

Turnover at the agency is unrelated to the spending questions, he said. At
least 15 employees listed in the partnership’s memoranda or website in 2008 are
no longer with the agency.

Executive Director David Dicks was traveling Thursday and not available for
an interview, Mendizabal said. Gregoire appointed Dicks, the son of U.S. Rep.
Norm Dicks, D-Belfair, as the agency’s original leader.

Legislators required the partnership to set up a foundation that would raise
private money to supplement its $16.1 million budget.

To create the foundation, it turned to K&L Gates, whose two main lawyers
on the project billed $478 and $314 per hour.

It’s unusual for agencies to tap outside law firms for help instead of
lawyers in the state attorney general’s office, but officials said the firm’s
expertise made it the natural choice. A lawyer at the firm had helped write the
legislation that called for the nonprofit foundation.

The agency said it needed the work done quickly by experts.

But the contract deadline was extended twice, and by June 2009, after the
partnership had created the foundation on paper and given it $167,000, the
foundation still had not done any fundraising. It did collect corporate
donations later that year, but still has no staff, Mendizabal said.

The money paid to the foundation came with no clear public benefit, auditors
determined. But the partnership said the $19,960 spent on a documentary helped
educate viewers of public television about threats to Puget Sound, and another
$70,000 for a program that educated journalists led to more than 19 news stories
highlighting the sound’s plight.

NO FRAUD EVIDENCE

The auditor’s office made no recommendations for dealing with violations of
the law. The agency has no enforcement powers. It can refer a fraud case to
prosecutors or the attorney general, spokeswoman Mindy Chambers said, but it
didn’t find evidence of fraud at the partnership.

Gregoire’s spokeswoman, Karina Shagren, said the governor hasn’t yet been
able to read the audit. The governor’s staff doesn’t know, Shagren said, if
Gregoire ever received her apple cider.

Jordan Schrader: 360-786-1826 [email-masked] blog.thenewstribune.com/politics

Read the audit

To see a copy of the full audit, see this story on our website, http://www.thenewstribune.com/

Copyright
2012 . All rights reserved. This material may not be published, broadcast,
rewritten or redistributed.

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