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NYC Comptroller: Agency Sandbagged Tech-Deal Audit

New York City Comptroller John Liu has asked the city’s Department of Investigation to examine a multimillion dollar technology contract, saying the Department of Consumer Affairs is stonewalling an audit his office began.

Liu said Wednesday that his office halted an audit of the DCA’s contract with Gartner Inc. of Stamford, Conn., which in 2007 signed a $2.7 million contract with the DCA to coordinate an online licensing system for businesses, because of “unprecedented interference by agency officials.” Liu instead is referring the audit to the DOI.

Liu said rising costs to the project triggered his audit early in 2012. A statement from Liu’s office said that by December 2012, DCA had quadrupled its spending on Gartner and awarded the company $11.5 million, of which it has paid out $10.4 million. To date, according to Liu, the DCA has spent $25 million out of a total $33 million in contracts it has with various vendors on the project.

“During the course of the audit, my auditors encountered significant obstruction from DCA,” Liu’s deputy comptroller for audit, Tina Kim, said in a letter to DCA commissioner Jonathan Mintz. “The obstruction by your agency was such that we could not rely on the testimonial or documentary evidence that was provided to us during the audit.”

According to Kim, the DCA’s obstruction included misleading information, omitting some requested materials; and insisting that a senior DCA senior management representative attend all meetings.

Liu’s statement Wednesday said “red flags” included questionable timesheets and chief information officer Christopher Montgomery’s departure for New Jersey Transit in the middle of the audit.

DCA officials say the $2.7 million initial budget was for the first of a multi-phase project. The project, they say, did not run over; rather, additional funds were publicly authorized as each follow-up phase began. They also said timesheets were legitimate. Additionally, they said Montgomery left simply because New Jersey Transit had made an attractive offer.

DCA senior communications officer Abigail Lootens issued the following response: “The citywide Accela project will replace decades-old systems to greatly enhance online customer service for businesses, and today’s irresponsible misrepresentation by the comptroller’s office in their unfinished audit ignores the fact that the department made each requested witness and every one of the thousands of documents fully available.

“We believe that DOI’s review will show that the project has been properly managed and that the new Accela system will make doing business much easier for tens of thousands of New York businesses.” 

Gartner spokesman Andrew Spender said the company has fully cooperated with requests for information from Liu’s office. “We will continue to work with the NYC Department of Consumer Affairs to provide the comptroller with further information or additional details that are requested,” he added.

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