[1st-mile-nm] Sandoval County Broadband: Auditor's Findings

[Richard Lowenberg]

I missed this when it was reported a few weeks ago.   rl
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November 21, 2007]

Auditor Faults Project 'Waste': Sandoval County broadband effort
mismanaged, official says.

(Albuquerque Journal (NM)

Sandoval County's ill-fated broadband project was plagued by
"mismanagement, waste and abuse," according to State Auditor Hector
Balderas.

After two years, the county had spent more than $2.6 million on its plan
to deliver cheap high-speed wireless Internet access to service providers
across the county.

What it had to show for that was no network and a host of problems.

"It is clear that the county failed to institute the appropriate practices
and oversight to ensure proper management of public funds," Balderas told
the Journal on Tuesday. "... Their lack of accountability hurt the
taxpayers of Sandoval County."

Balderas' office released Sandoval County's fiscal 2006 audit Tuesday with
findings that outline four alleged violations of state regulations and one
admonishment about poor procurement practices relating to the project.

He said an investigation by his office continues, focusing on "particular
transactions and persons."

County officials said Tuesday they would have no comment until they get a
final copy of the audit. They have only seen a draft.

County Manager Debbie Hays didn't return a Journal message Tuesday
evening.

Management responses were included in the audit and challenge some of
the findings.

Violations alleged:

Failure to report $2.2 million in expenditures -- including $1.3 million
for broadband construction -- to the state Department of Finance for the
audit. The nondisclosure would have affected county bond ratings and
"exposes the county ... to possible fraudulent activity."

Amending a planning contract for $300,000 to include the plan's
implementation, avoiding proper procurement regulations. The amendment
more than quadrupled the contract's worth.

Not checking that goods and services paid for were actually received.

Sending official e-mails regarding the audit to the offices of the
governor and attorney general in violation of the State Audit Act. The
audit states the e-mails could be "misconstrued as an attempt by the
county to impair the independence of the independent public accountant or
the Office of the State Auditor."

Giving the original contract for the broadband project to Utah company
AQV, which also wrote the request for proposals. That is admonished as a
poor practice.

"Had the county followed more prudent practices, much of this loss in
taxpayer dollars could have been prevented," Balderas said Tuesday.

The county lost about $1.3 million in taxpayer dollars after two
contractors allegedly breached their project contracts and walked away
without delivering a working broadband network.

County officials were forced to start over on the network and are
currently suing the contractors. The county maintains it did acquire
valuable programs with some of the money.

There are no penalties for the violations, but the findings do affect the
county's financial rating.

The county disputes that it violated any procurement procedures when
contracting for the project. The scope of AQV's contract was not changed
significantly, the county states.

The county also claims the violation of not verifying receipt of services
was erroneous because it could not find anyone at the state Department of
Finance who had heard of the regulation and that the state agency
indicated the provision was impossible for counties to meet.

Commissioners have approved a new contractor to build the network at an
estimated additional cost of $950,000.


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Richard Lowenberg
P.O.Box 8001, Santa Fe, NM 87504
505-989-9110,  505-603-5200 cell

1st-Mile Institute
New Mexico Broadband Initiative
www.1st-mile.com
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