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The Associated Press March 15, 2010, 6:14PM ET

Md. audit faults Public Broadcasters for payments

More than $2 million paid to one vendor by Maryland's Public Broadcasting Commission may have violated rules that govern how contracts are awarded, according to an audit released Monday.

State auditors said roughly $1 million paid to the direct marketer between 2005 and 2007 was done without commission officials seeking competitive bids, a written contract or obtaining the appropriate approval according to state law.

Also, they said they had "significant issues" with how the same vendor obtained and handled contracts worth an additional $1.7 million beginning in August 2007. Auditors said the vendor had been chosen when other firms were offering "bulk" printing discounts not available from the company that won the contract and that commission officials did not have adequate documentation about how different bidders had been evaluated.

Officials with the Maryland Public Broadcasting Commission contested many of the audit's findings in a written response. The audit did not disclose the name of the vendor. Maryland Public Television's Executive Vice President Larry D. Unger refused to disclose the identity of the firm in question when contacted by The Associated Press.

Commission leaders said in their written response that the $1 million to the vendor between 2005 and 2007 was paid because the procurement process was ongoing and the commission needed to continue fundraising to operate, so "by necessity" they used the incumbent vendor. They added that they consulted with and followed the advice of Maryland's Department of Budget and Management officials in their handling of the payments in question and that the vendor is one of a small group of firms that have worked with public television clients.

"Under the circumstances, MPBC believes it acted properly," they wrote.

State auditors said they found no evidence state Budget and Management officials condoned the way the contract was handled.

"We heard all their points but we think we have valid issues," legislative auditor Bruce Myers said. "The fact that they went almost two years without a contract and spent $1 million -- that right away raises some concerns for us. It's rare that would happen in the state."

Broadcasting commission leaders also rejected concerns about the subsequent $1.7 million in contracts awarded to the same vendor, noting the process was monitored by an assistant attorney general, but did not dispute the alleged lack of documentation about how proposals were evaluated.

State auditors also found the contract was not appropriately monitored; and payments were processed without the vendor submitting documentation to support certain billings for postage and printing costs. They note that the senior manager responsible for the contract's monitoring also served as the broadcasting commission's representative in an industry workgroup with the vendor and that one of the manager's subordinates had served on the contract evaluation committee for the vendor's procurement.

The auditors referred the potential conflict of interest to the state attorney general's criminal division for investigation; over the written objections of broadcasting commission leaders.

"Indeed, no findings in this Audit constitute a crime and MPBC believes that is irresponsible to suggest that there may be," the response said.

Rick Abbruzzese, Gov. Martin O'Malley's chief spokesman, said his office was looking into the audit but said it could be tough to comment because the issues began under the previous administration and involved different department leaders.

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