It appears that the former state Department of Information Systems Director Mark Myers violated standards of conduct in state law, potentially wasted state resources and failed to adhere to the department's technology policy, on the basis of a review of three projects costing $8.2 million and his personal relationship with a vendor's representative, a legislative auditor told lawmakers on Thursday.
But Myers defended the three purchases in a letter distributed to state lawmakers, saying the purchases were well below the prices the department could have paid for the equipment and that he didn't "exercise discretion in favor of another person due to any personal relationships, real or perceived."
Deputy Legislative Auditor Jon Moore told lawmakers that "we do believe this situation is under investigation, so I am limited to how much new information I go into relating to this [audit]."
In response to a query from Rep. Dwight Tosh, R-Jonesboro, Moore said the investigation is an ongoing criminal investigation but that he's "really not at liberty to say" which agency is conducting the investigation.
A review of Myers' text and email messages stored on the department's servers revealed "a personal relationship between the director and a vendor representative included in at least three agency procurement projects," Moore said in discussing the findings of the audit.
"This relationship and the correspondence contained on the servers appears to conflict with state law and the agency's technology policy, respectively," Moore told the Legislative Joint Auditing Committee's Committee on State Agencies.
Myers resigned as the department's director on Nov. 23, and remained on the state payroll until Jan. 1, Moore said. His salary was $137,360, according to the state's transparency in government website. In November, Gov. Asa Hutchinson's spokesman, J.R. Davis, said the governor asked Myers to resign, but Davis declined to elaborate.
Davis said Thursday that "the governor was made aware of the findings months ago and acted immediately and appropriately.
"Mr. Myers willingly submitted his resignation, and he used his leave time through the end of the year," Davis said Thursday after the committee's meeting.
The unnamed vendor made sales to its customers through resellers and didn't make direct sales, Moore said. Two different resellers were involved, Moore said.
Moore declined to disclose the names of the vendor, the vendor representative or the resellers.
Arkansas Legislative Audit Legal Counsel Frank Arey denied this newspaper's public records request for that information.
"As to the Arkansas Freedom of Information Act, upon inquiry we have been informed that there is an ongoing criminal investigation by a law enforcement agency regarding this matter. Therefore, pursuant to Ark. Code Ann. § 25-19-105(b)(6), we respectfully decline to permit inspection of our documents," he said in an email.
Moore said the three procurement projects under which the vendor representative was involved included one in which the department procured about $642,000 of vendor equipment through "reseller A" in August 2016 for "a data consolidation proof of concept" to help determine whether the concept had practical potential.
The initial invoice contained equipment, software licenses and services, and, according to reseller A, a replacement invoice in the same amount was produced at Myers' request with the service portion deleted, Moore said.
State law requires that contracts that contain services of at least $100,000 be presented to the Legislative Council, and "by misclassifying the services as equipment and software licenses, the agency avoided legislative review," Moore said.
Myers said in his letter that "at no time was there any effort to avoid legislative review."
Current Department of Information Systems Director Yessica Jones said the department has asked the reseller to take this equipment back and the state never paid for the equipment.
Under the second project at issue, the department purchased about $584,000 in equipment in April 2016 to build and implement a video infrastructure to improve the existing Voice over Internet Protocol system available to state entities, Moore said. The equipment was purchased from the vendor through "reseller B" and as of Feb. 17 the department had yet to utilize part of this equipment costing $255,000, he said.
Myers said in his letter that as to why the gear has not been installed is unknown to him because the department has ongoing efforts to add unified communication capabilities to the Department of Parks and Tourism and the Department of Finance and Administration.
The information department is preparing a strategy on how best to utilize that equipment, Jones said.
The third project involves working with the state Department of Education to provide a secure network to increase bandwidth to schools, according to Moore.
"Agency staff indicated that several networking retailers were contacted to discuss parts of the upgrade project," he said. "However, after only a short period of time, the former director decided to use the vendor and reseller B before any other quotes were received, resulting in the purchase of $6,973,000 in vendor equipment from reseller B.
"While the agency was able to increase bandwidth to the school districts, the use of the vendor without obtaining sufficient input from agency personnel with technical knowledge appears to be questionable and not in the best interest of the state," Moore said.
Myers said in his letter that he consulted with the information department's then-chief operating officer "at every step of the way for this procurement choice and process." The Legislative Council approved the purchase in the spring of 2015, the letter said.
In its response to the audit, the department said it will formalize its accepted practice for agency personnel with technical knowledge to determine "the best breed and pricing factors" before making a recommendation to the department's director.
Metro on 06/09/2017