Lawmakers seek accounting of emergency purchasing authority given to Missouri agencies

Missouri lawmakers pressed for more details Wednesday on the unprecedented decision by state officials to suspend some procurement rules at the beginning of the pandemic to allow agencies to make large purchases without obtaining prior approval.

Rep. Peter Merideth, a St. Louis Democrat and ranking minority member of the House Budget Committee, asked the Office of Administration (OA) whether there was a tracking mechanism to identify all the expenditures made under the authority; whether there will be any audit of the spending; and to provide documentation of what the state got out of it.

“I’m curious with the contractors if we have reports about what value consultants provided and things like that,” Merideth said. “I’d really like to see some accounting.”

Budget Director Dan Haug said he was not involved in the discussions to grant emergency procurement authorization, but noted he would work to get Merideth answers.

“Those kinds of questions I unfortunately am not going to be able to answer,” Haug said earlier in the hearing.

Lawmakers’ scrutiny came a day after The Independent reported that OA, the agency that oversees contracting and purchasing for Missouri government, gave state agencies an unprecedented emergency authority to make purchases over $50,000 to respond to COVID-19 without following the typical procurement process or getting prior approval.

Logs detailing purchases that agencies made provide a window into the tens of millions of state and federal dollars spent during the pandemic — paying for everything from face masks to private consultants to cremation services to picnic tables.

While some lawmakers like, House Budget Committee Chairman Cody Smith, R-Carthage, said they had been aware of the authorization, others like Merideth said they had not been informed it was in place.

The request for more information about the emergency authority came at the end of a nearly six-hour hearing that was dominated by lawmakers’ questioning of Department of Elementary and Secondary Education (DESE) leaders and local school officials.

What was intended to be a conversation about DESE’s plans for federal stimulus funds and charter school funding at times veered into lawmakers’ raising concerns on everything from the department’s recent survey on critical race theory to virtual learning options. 

It left little time for discussion on how other state agencies spent federal pandemic funds.

“We are clearly not going to have time enough to talk about all the CARES spending that has occurred in the state of Missouri in the next 30 minutes,” Smith said, who added a subsequent hearing would be necessary.

Smith said the emergency authorization was the right decision at the time. But now lawmakers will begin their oversight role, he said, with Wednesday’s hearing as the first step in looking into how the emergency authority was used and how federal stimulus funds were spent.

According to the Office of Administration’s records on file that date back to 2002, it was the only time the Division of Purchasing granted an emergency procurement authorization statewide to executive branch agencies it oversees, said Christopher Moreland, a spokesman for OA.

The authorization was in place for a little over a year from March 16, 2020 to March 31, 2021.

Under the authority, agencies were asked to maintain and submit logs of their purchases that exceeded $50,000.

What was included in the spreadsheets submitted to OA varied. Some departments kept detailed logs. Others simply submitted purchases that were eligible for federal reimbursement but didn’t fall under the emergency authority. Several agencies said they didn’t use the emergency authorization at all.

Some agencies didn’t turn in any logs to OA but provided spreadsheets of their COVID-related purchases to The Independent upon request.

Some of the largest expenditures were on consultants that advised the state on its pandemic response. Some companies that have already been paid millions under their emergency contracts have recently had their contracts with the state extended through the end of the year.

OA previously said it has no immediate plans for an audit of emergency spending, noting it required agencies to maintain logs and that state Auditor Nicole Galloway has been reviewing how federal stimulus funds are spent.

When asked if the auditor’s office would be conducting an audit of its own, Eric Slusher, a spokesman for the office, said any time state agencies are audited an evaluation of their compliance with certain legal provisions and efficiency of management operations, like financial transactions, are included.

During the roughly 30 minutes that lawmakers had to ask OA questions Wednesday, Haug said one example of a consultant used amid the pandemic was to aid the Office of Administration’s accounting department, which he said has roughly 40 people, to disseminate and report $520 million in federal funds to counties.

“We didn’t really have the ability to do this oversight of this local money that the federal government told us to hand out,” Haug said, “so that was one of them.”

Statewide elected offices

In addition to state agencies, the offices of statewide elected officials also fell under the emergency purchasing authority granted by OA.

State Treasurer Scott Fitzpatrick’s office was the only statewide elected official that OA provided a log for in response to The Independent’s records request.

Mary Compton, a spokeswoman for the Treasurer’s office, said the office did not use the emergency authority, citing the fact that no COVID-related purchases over $50,000 were made. What the department did submit on its log was expenditures that were reimbursed under the CARES Act, Compton said.

In addition to purchases like hand sanitizer and gloves to open mail, the log also listed a little over $7,100 for monitors and laptops, which was used to support remote work, Compton said.

Secretary of State Jay Ashcroft’s office provided a log of COVID-related purchases to The Independent upon request. All the purchases documented on the log were under $50,000 and included things like $21,000 on yellow floor strips to maintain social distancing at polling places, over $34,000 on masks with shields for local election authorities for the June 2020 municipal elections and a little over $1,000 for a contracted certified nursing assistant to take temperatures at the Secretary of State office in March 2020.

Adam Gresham, Lt. Gov. Mike Kehoe’s chief of staff, said during the virus’ initial outbreak in the spring of 2020, Kehoe wanted to support the efforts of both the public and private sectors to aid hospitals, law enforcement and first responders with personal protective equipment and improve the supply chain by working with Missouri companies to temporarily shift their production to manufacturing it.

“In the course of this second focus of effort, our office purchased $9,000 of hand sanitizer from J. Rieger Company in Kansas City,” Gresham said. “This hand sanitizer was included in first-responder kits.”

Representatives for State Auditor Nicole Galloway’s office and Attorney General Eric Schmitt’s office said their offices did not buy anything under the authority granted by OA.

“Everything we purchased that relates to COVID (hand sanitizer, etc.) was purchased through our existing office budget,” Chris Nuelle, a spokesman for the AG’s Office, said.

Gov. Mike Parson’s office treated questions on whether it made any COVID-related purchases or utilized the emergency procurement authority as an open records request.

In response, his office said there were no known records to produce that were responsive.