We don’t expect the government to be perfect or even terribly efficient, at least by private sector standards, but it should at least perform due diligence when spending taxpayer dollars.
However, a just-released report by the West Virginia Legislative Auditor finds that the state’s Office of Technology (OT) and the Broadband Technology Opportunity Program (BTOP) failed miserably on a multi-million dollar purchase of Internet routers for public schools, libraries and state police barracks.
First, the background:
In 2010, the state paid $24 million in federal stimulus money to Cisco for 1,164 Internet routers. A router is a piece of equipment that connects computer networks.
Charleston Gazette reporter Eric Eyre began investigating the purchases, revealing that the state significantly overspent for routers that provided much more capacity than most of the locations required, now or in the future.
That triggered an investigation by the Legislative Auditor. Its report details just how poorly the deal was executed and how much money was wasted.
The audit found:
–The majority of the routers were way over the needed capacity and thus unnecessary.
–The state could have saved at least $8 million by following Cisco’s own literature recommendations and bought lower capacity routers that would have easily met the Internet requirements.
–The routers don’t work with the state police voice over Internet (VoIP) phone system, so they have been installed in only two locations. The state will have to spend another $85,000 to buy additional equipment to make them work.
–Some state agencies did not do a proper survey before the purchases to find out the kind of routers needed.
–The State Purchasing Division allowed the Office of Technology to bypass state law in purchasing the routers from Cisco without going through the bid process. Competitive bidding could have saved the state millions.
How did this happen?
Clearly, several state agencies involved in the router deal dropped the ball. However, the audit also points a finger at Cisco, suggesting that the company showed a “wanton indifference to the interests of the public.”
“The Legislative Auditor believes that Cisco sales representatives and engineers had a moral responsibility to propose a plan which reasonably complied with Cisco’s own engineering standards,” the report says.
Perhaps, but up-selling is nothing new, and with billions in federal stimulus money being pushed through, it’s doubtful West Virginia is the only place where taxpayer dollars have been wasted.
However, as the audit reveals, in this case our state government was either negligent or a willing participant in this fiscal fiasco.