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MaineHousing's Computer Contracting Under Scrutiny
10/03/2012   Reported By: A.J. Higgins

Two days after the release of a federal audit into housing violations at the Maine State Housing Authority, new attention is being focused on more than $7 million the agency paid to computer service contractors. Federal investigators say the failure of the authority's former executive director to seek competitive bids for those contracts runs afoul of state and federal procurement policies. And members of the Housing Authority's board of directors are hiring an independent auditor to review the contracts, which were in effect over a six-year period.

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The federal audit released this week by the Housing and Urban Development Inspector General focused largely on deficiencies in Section 8 housing administered by the Maine State Housing Authority.

Members of the Agency's board are now focused on a related finding, that former Executive Director Dale McCormick authorized an $850,000 contract to one vendor without seeking competitive bids. "It's bigger than us -- that's why we want to hire some third-party professional and have them take a look at it," says MSHA Board Chair Peter Anastos.

Anastos says he's found that McCormick signed off on deals valued at more than $7 million over a six-year period, and says he'll commission an independent review. "What we do know is that an awful lot of money was spent without much -- that we can see -- result and was done in a way that goes against the rules and regulations of both HUD and the state."

Meeting with reporters at the State House, several MSHA board members say they attempted, without success, to obtain details about the contracts from McCormick, who ran the authority for the last seven years. McCormick resigned in March after repeated clashes with the board on an array of issues.

The majority of the members on the MSHA board have been appointed over the last two years by Gov. Paul LePage, who was also a McCormick critic. Board Vice Chair Lincoln Merrill says the two firms that were awarded more than $7 million in contracts over the last six years are Joseph Associates of Hallowell and Lynn Kinney, of Pownal. And he says that Cormick had also contracted with both firms when she had served as Maine's state treasurer.

"It's not Maine State Housing Authority's business to call up their buddy down the street and say, 'I'd like to give you an oil contract for the year at Maine State Housing,'" Merrill says. "It is not acceptable, it is not the same thing. Is it illegal? Maybe not. Is it a sweetheart deal? Perhaps. Is it something that would happen in private business? Probably. But should it happen at the Maine State Housing Authority? Absolutely not, they should do everything they possible can to be above the fray, to be honest, open with RFPs, with documentation, so that nobody can question: 'Why did you get that contract?'"

The computer servives provided, says Merrill, involved analysis of data for the LIHEAP fuel assistance and home weatherization programs. Board chairman Peter Anastos says that throughout his discussions with McCormick, he was repeatedly stonewalled when trying to find out why MaineHousing had awarded the two contracts to the the two vendors.

"We asked many times about this computer program at board meetings," he says. "I mean, you can go back over tapes or whatever, it's all there. We tried to find out, but it was a moving target on the numbers -- and they kept going up."

Maine State Treasurer Bruce Poliquin, who is also a member of the MaineHousing board, says HUD's investigation into the agency's contract awards is ongoing and that McCormick's past actions could require the state to return more than $100,000 to the feds.

"That's why they're coming back to us right now and wanting us to justify $112,000 of this computer software development work," Poliquin says.

McCormick, meanwhile, has declined comment on the findings of the audit, or on the board's call for an independent review of past contracts.


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