SALT LAKE CITY (ABC4 News) – An audit released Wednesday shows a lack of communication among state leaders and documentation for procuring millions in no-bid contracts.
“From our perspective, the state was not as well prepared for a pandemic as it should have been,” said State Auditor John Dougall.
Auditor Dougall’s office realized decisions were made quickly.
“What we saw is clearly GOMB was tip of spear on a lot of these activities really driving down the path of purchasing,” said the auditor.
GOMB is the Governor’s Office of Management and Budget that was recently run by the now-retired Kris Cox.
She was originally mentioned with Lieutenant Governor Spencer Cox by NOMI Health’s Mark Newman in a Silicon Slopes townhall on March 23rd.
“It is one of those things I think the personal at GOMB were doing the best job they could given a situation, but we note that they were probably more flat-footed as they should have been given what should have happened in advance,” said Dougall.
The audit found a relationship was built with the tech companies in late March.
ABC4 News uncovered an email dated March 27 from the Lieutenant Governor to health officials. The email indicates Lt. Gov. Cox was well aware of what the CEO of NOMI Health was referring to at that tech townhall.
“I understand that UDOH shut down the efforts of Timp Hospital to test because of the concern over the FDA’s approval of Co-Diagnostics test I reached out to Senator Romney’s team and they went straight to the FDA and were told that the preliminary approval is sufficient and couldn’t understand why we shut them down. See the email below,” said the Lt. Governor. “Please give this information to whoever needs it at Health and let’s get them to green light to continue today. Please tell your teams that we need to move heaven and earth to get more testing.”
“This effort turned from a solely private fundraising effort into a State-funded public-private partnership,” the audit stated.
Auditor Dougall’s team found “probably between March 23, 2020, and March 27, 2020, GOMB decided to utilize the [Silicon Slopes].”
The audit goes on to state, “When the Governor announced an official partnership with [Silicon Slopes] on April 2, 2020, [Silicon Slopes] stated, “No tech company is going to make any money off of this,” which we interpret to mean that suppliers would deliver goods or services at cost. However, we cannot validate that claim.”
“While NOMI and those folks delivered what the state expected, in general, the state didn’t have a good strategy driving a lot more folks through to get tested. And that was probably the big falling,” Auditor Dougall added.
The audit shows us during the original 60-day contract with NOMI Health, the state averaged 540 daily tests at Test Utah sites. Far less than the 3,000 anticipated tests. The low testing numbers cost the state more than $235 per test instead of the roughly $44 quoted.
The audit found, “GOMB determined the vendors used and negotiated the prices for those goods and services. Often, the approvals were verbal and not documented. In addition, the Governor’s Office represented that, “any competitive cost analysis was done informally based on the best knowledge, experience, and judgment of respective decision-makers and advisors at that time.” If written documentation exists of a competitive analysis, the Governor’s Office was unable to provide it to us for this review.”
In July, after competitive bidding, the state-issued another contract to NOMI Health to help run the Test Utah Program until 2025.
“They determined that it was best to continue down the path with those they had already been working with, and so that is how we ended up where we are at,” said Dougall.
GOMB was authorized to oversee projects through the Utah Leads Together Plan. Some of those projects include developing the Healthy Together app, creating a dashboard, and a health assessment survey.
The governor’s offices wanted to see a daily report of economic and health information on the coronavirus pandemic.
“Further, UDOH did not have the resources in place to quickly visualize that data in real-time in order to provide meaningful data to key stakeholders in a timely manner. UDOH had traditional contact tracing methods in place but had not considered implementing apps and other technology to aid in this effort. UDOH officials report this was due to a lack of funding and personnel resources.”
GOMB saw the need for a similar dashboard to make informed decisions.
The state bought the dashboard for $2 million dollars.
“This dashboard is not a public-facing tool as it contains certain sensitive health-related information and access is restricted to key stakeholders and decision-makers,” the audit stated. “Introducing an additional dashboard resulted in duplication of development and maintenance effort and additional cost.”
When asked if there was any concern over the data being misused Auditor Dougall responded, “We didn’t see any of that from our perspective in the audit.”
Healthy Together App:
An app developed by the company Twenty was supposed to help use geolocation to track the public for COVID-19 contact tracing, as well as interface with the state’s dashboard.
GOMB issued the company a one-year contract worth $6.35 million. The state paid out $4 million on the contract at the time of this report.
In July, the state turned off the app’s geolocation tracking because of public concern and lack of participation.
The audit found, ” The State has also initiated the procurement of a Bluetooth proximity contact tracing function to replace the geolocation tracking function. Under this contract, the State paid $2.75million for licensing and development costs and retains none of the intellectual property.”
Meds in Motion
The audit found GOMB pushed for an order worth $800,000 of hydroxychloroquine because there was a belief it could help cure COVID-19.
“GOMB believed that UDOH intended to purchase the medication from emergency funding. UDOH denies that they intended or authorized State funds to be used,” the audit states. “We could find no evidence, verbal or otherwise, that UDOH authorized the purchase. “
The medication became highly politicized and doctors over time decided there were more risks than benefits to the medication.
“We are concerned that this purchase occurred without anyone’s explicit authorization. We also noted the State lacks an effective system that allows the State Division of Purchasing to ensure purchases are properly authorized,” the audit stated. “The State later canceled the order and received a refund.”
Auditors found the cost appeared to be reasonable at the time and it was reasonable stockpile possible treatments.
“Unfortunately from our perspective, the health department showed they weren’t well prepared for this type of dynamic. There were lots of opportunities for them to do that preplanning like we described in the report and they didn’t,” said Auditor Dougall.
Auditors found that “UDOH identified pandemics as the top priority hazard to Utahns for the period 2019 through 2024.”
The audit found one high-level official who recalled a discussion over pandemic training in the past few years.
“This official and others indicated that while the State was prepared for the concept of a pandemic, the speed and breadth of this pandemic surprised many, and better preparation and training could have been useful,” the audit stated.
Auditor Dougall and his office feel the state could learn from these mistakes moving forward.
“Many decisions they made were reasonable, there is various areas where there is opportunities for improvement,” he said.
The office recommends:
- The Governor present a proposal to the legislature regarding setting aside adequate emergency State funds that can be accessed for emergency use upon declaration of a state of emergency or in preparation for an imminent emergency.
- DEM be more proactive in its emergency preparation by identifying significant risks to the State and placing more emphasis on strategic planning to mitigate those risks.
- DEM, UDOH, and other officials increase the frequency of statewide brainstorming and training events to better prepare for future emergencies. Brainstorming should include discussions on data sharing, constraints on the healthcare system, approaches to contact tracing, critical supply chain constraints, etc.
- DEM and UDOH increase community outreach programs to help the public better prepare for future pandemics and other public health-related emergencies.
- The Governor use this pandemic as an opportunity to debrief operational strengths and weaknesses regarding the State’s emergency response.
- The Governor direct the Commissioner of Public Safety to establish improved criteria for establishing Unified Command in a timelier manner.
The Governors Chief of Staff Justin Harding responded to the recommendations agreeing mostly with the auditor’s findings.
One disagreement occurred on the relationship between Governor Gary Herbert and Lt. Governor Cox with Silicon Slopes.
A footnote on the audit shows the credit given to Lt. Governor Cox during the March 23rd Silicon Slopes Townhall ABC4 News has reported on.
The footnote states, “We also note that the Governor and Lt. Governor had a relatively close relationship with [Silicion Slopes] and various of its member companies. This causes particular concerns when contracts are steered to those companies, especially at the approval of the Governor. We also note that it is possible the Governor’s Office may have engaged in the sunk cost fallacy, pivoting into a contractual arrangement with certain [Silicion Slopes] associated vendors without reconsidering other alternatives when the initial arrangements changed.”
Harding responded, “We want to be clear that any such relationship did not influence the award of contracts. The review of which contract should be awarded to which entities was performed by staff members who exercised independent judgment in making recommendations about contract awards.”
Auditor John Dougall reaffirms ABC4 News he did not find any criminal intent during this audit. He says his team is personally suffering from the pandemic and he hopes their findings will help shape our state’s pandemic’s response moving forward.
Below is the audit report.