Inadequate Internal Controls Cause Procurement Problems in West Virginia
RCED-89-194: Published: Sep 6, 1989. Publicly Released: Sep 27, 1989.
- Full Report:
Pursuant to a congressional request, GAO reviewed West Virginia's Department of Energy's (WV/DOE) contracting procedures under its Abandoned Mine Reclamation Project to determine whether it complied with federal procurement and internal control standards.
GAO found that WV/DOE: (1) did not establish adequate internal controls to ensure compliance with federal procurement standards; (2) lacked written policies and procedures to document or guide procurement activities; (3) did not consistently and uniformly apply federal procurement standards in procurement activities; (4) failed to include federally required clauses and provisions regarding kickbacks, equal employment opportunity, and contract termination rights in 15 contracts; (5) did not comply with one time-and-materials contract's provisions regarding contractor acknowledgement of work directives, notice-to-proceed, and contract extension, and did not adequately monitor performance; (6) did not timely process change orders to revise contracts' scope of work or to extend contracts; (7) incorporated two abandoned mine site reclamation projects into existing contracts rather than using competitive bidding procedures; (8) did not comply with federal audit requirements, although the Office of Surface Mining Reclamation and Enforcement reported that its procurement activities complied with state and federal requirements; and (9) established a task force to evaluate internal control problems, develop written policies and procedures, provide seminars to state personnel on general procurement procedures under federal grant programs, and review all emergency reclamation program contracts.