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Audits find lax legal reviews of state contracts

Posted June 21, 2012

— A pair of audits released Thursday say North Carolina is failing to provide required legal reviews for government contracts valued at $1 million or more.

The state Department of Justice and Department of Administration are failing to follow a 2010 law that requires big contracts for everything from supplies and equipment to printing and building maintenance to be read by a lawyer before they are signed to ensure the terms are favorable to the state. The law was enacted after other audits found that contracts had been mismanaged.

The state government spends about $242 million a month on contracted services, State Auditor Beth Wood said.

"If we continue to let these contracts go without a review, continue to go without being monitored, then you're going to continue to have wasteful spending in our state government," Wood said.

Some contracts don't include penalties for non-performance, so if the vendor does not deliver, the state has no recourse, she said.

Administration Secretary Moses Carey disagrees with the auditor's contention that 26 months is enough time to put a system in place to ensure the reviews occur.

North Carolina flag, NC flag, state flag, N.C. flag Departments say auditors misinterpret state law

"The Department of Administration is deeply engaged in procurement transformation, a strategic and deliberate process that will comprehensively change the way the state buys goods and services. This is a complex and time-consuming endeavor," Carey said in a statement. "As the auditor is aware, there is no funding for contract support as we develop procurement rules and policies, standardize manuals and create relevant training. We are doing all this with in-house resources while also addressing the day-to-day business needs of the state."

Chief Deputy Attorney General Grayson Kelly said his agency is available to perform contract reviews when asked, but is not required to determine whether all contracts above the limit undergo review.

Noelle Talley, spokeswoman for the Department of Justice, said state auditors interpreted the state law incorrectly and noted that they failed to find any evidence that any contract received by DOJ failed to receive an appropriate legal review.

Wood said the department has no system for tracking major state contracts to ensure that they are reviewed, and she urged the department to work with the Department of Administration to develop such a system.

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  • pbjbeach Jun 21, 2012

    In my own personal estimation there should be laws passed to protect the instrest of the taxpaying citizens of this state that demand that there be contract reviews prior to these multi-million dollar contract be review to protect the instrest of the state taxpaying citizens from contract fraud waste an abusive practices by the enitys that are receiving these state contracts at the taxpayers expensewhen there is this kind an amounts of states taxpayers dollars envolved there need to be mandatory contract reivew an not only that there should be reviews after the completion of this contracts to make sure that the contracts have been properly adminstred an that the proper payment have been made an according to the applicable provisions of these contracts an special provisions an that there was correct payment made for each indivsual line code item within these contracts as the state taxpayers deserve to have this kinds of oversight by our state government when this kind of taxpayers mo

  • sunshine1040 Jun 21, 2012

    all city county and state contracts over a $1.00 should be reviewed by lawyer we already have them on city county state and federal payrolls let them do their job. Its my money and I should be able to see where it is going (full disclosure) just pose it under NC contracts . gov and show us the signatures on them

  • superman Jun 21, 2012

    Mississippi is starting to look real good now Governor--thanks to you.

  • ladyblue Jun 21, 2012

    again maybe if i leave out the democrats i can get a post through..there have been a lot of goofs it seems from our state so this doesn't surprise me.

  • Just Once Jun 21, 2012

    This is me in Shock and Awe... :0

  • muggs Jun 21, 2012

    All state contracts should be made public with names of those involved,if you are going to be delegating authority to some to spend funds wisely and without corruption then a site in which all contracts with the state should be readily available with easy access to the content of the contracts,after all it is our money,to deny there are favors not being passed along is just ridiculous,closed door sessions should be eliminated and sealed bid contracts open for public review,much of this info is made available,that is after the contracts are awarded.

  • patrick85ed Jun 21, 2012

    This is news? This is commonplace in government, even in NC State government.

  • Stormy13 Jun 21, 2012

    If I ran my house budget like this I would be living on the streets in no time!

  • ConcernedNCC Jun 21, 2012

    A pair of audits says North Carolina is failing to provide required legal reviews for government contracts valued at $1 million or more.

    That's because too many eyes on a contract can reveal who all is related to whom.