The Investigators: Is there waste in Louisiana government contracts?

The Investigators: Is there waste in state contracts?

BATON ROUGE, LA (WAFB) - From designing traffic patterns to funding services for people with disabilities, the state of Louisiana negotiates and operates thousands of personal, professional and governmental service contracts and agreements.

According to the Louisiana Transparency and Accountability (LaTrac) database in the state's Office of Contractual Review, there are 12,457 total current contracts and agreements. Administration representatives said the database may list duplicates or expired contracts and the actual total number is 6,173.

State Treasurer John Kennedy said the number is much higher and he believes there are more that go unreported. He added some of the contracts, which are paid for in part with taxpayer dollars, are a problem, especially as the state faces a near $2 billion budget gap.

"I'm not saying that all consultants are bad," Kennedy said. "Some of them do add value, but we have way, way, way too many of them who don't."

Kennedy said the state wastes millions of dollars in unnecessary contracts and agreements. He added some of those millions can be used in other areas.

"Every dollar we spend on a consultant is a dollar less we have to spend on our universities, roads and on coastal restoration," Kennedy explained.

Commissioner of Administration Kristy Nichols said the state has decreased its total number of contracts in the past seven years and plans to continue to do so in the current fiscal year and in the future.

"We've reduced contracts by $1.7 billion since 2008," Nichols said. "The executive budget this year alone has $163 million in contract reductions, but those aren't going to get you all the way."

Kennedy believes while the state may have made some reductions, there are still too many that waste money.

"Contract 672113 - this is with a California consultant 'to provide assistance to students to learn valuable social skills through organized play on their recess and lunch periods.' Most kids don't have problems with recess or lunch. They don't need a consultant from California to help them," Kennedy said.

The contract, which was worth $94,000, expired in 2009. The Investigators found current contracts that not only raise concern for Kennedy but to the everyday taxpayer.

Government contract 734975 to the University of Tennessee, which is worth $189,000, is listed as "monitoring the Louisiana Black Bear population; continued health of the population, monitoring adult female survival and continue hair-snare work in the Texas and Upper Atchafalaya population."

Personal contract 734230, which is worth $258,000, is listed as to "supervise, restore and mount the Albrizio Mosaic Mural and deliver it to the Capitol Park Museum."

There was also consulting contract 730926, which is worth $3.4 million, to a company called BBR Creative. It's listed to "provide assistance in developing and executing a strategic marking and communication program for LED."

When taxpayers were shown some of the contracts, they said they weren't surprised.

"They say they don't have any money, then why have a consultant if you can't build a bridge?" asked Ronald Rome of Baton Rouge. "They hire all of these consultants and they all say the same thing and nothing gets done."

"All you need in the state of Louisiana to get a contract is to know somebody and that's just not right," Kennedy added.

Nichols said there are regulations, checks and balances in the contracting process and it's all overseen by the state's Office of Contractual Review.

"I just don't have a lot of confidence in what's going on," said Mary Nola of Baton Rouge. "And, I don't want to name names."

In 2014, a bill to tighten the regulations on how state contracts are awarded passed the legislature unanimously, but it was vetoed by Gov. Bobby Jindal. This session, there are at least two bills that bring contract regulations back to the table and legislators hope that now, in a different financial situation, the governor has a change of mind.

State Rep. Jerome "Dee" Richard, I-Thibodaux, is the author of House Bill 30. Richard's bill would require any proposed contract over $40,000 to get approval from the Joint Legislative Committee on the Budget. It would also move certain funding from the contracts into the Higher Education Financing Fund.

"It brings transparency and brings money to higher education," Richard said. "How can you lose with that bill? You cut these contracts, you give that money to higher ed, instead of raising tuition, which they're going to try to do again."

If you ask Kennedy, the fix to the state's financial problems lies in part with eliminating what he deems the state's unnecessary contracts.

"We can eliminate 10 percent of them and the taxpayers in Louisiana would never notice, except for the fact that we'd have more money for LSU, Southern and the Baton Rouge Community College," Kennedy said.

Nichols said across the board, contract cuts could have negative effects, because many contracts provide critical services.

"If you take a very targeted approach at contracts and say, 'We're going to cut 10 percent across the board - no matter what contract, no matter what agency, no matter what payer source' - you can have very negative, unintended consequences. It is disingenuous to suggest this is the way to balance the state's budget," Nichols explained.

Richard disagrees. He said while eliminating one $300,000 contract won't fill the state's $1.6 billion hole, it could be one of many.

"If you get rid of 1,000, it will. There are 20,000 contracts, so you can't tell me 10 percent are not wasted. They are. We can prove it. They're out there. People have seen them, but we still can't get the governor to," Richard said.

Attempts were made to reach Gov. Bobby Jindal on the above contracts and if he thought there are wasted contracts being paid out. The following statement from his press aide, Shannon Bates, was sent:

"We have already reduced the budget by $9 billion and cut the number of employees by 30,000. We have also reduced contract amounts by more than $1.7 billion, and the FY16 Executive Budget already proposes reducing contract funding by an additional $163 million. We are always open to new ideas on how to further reduce government spending so we can invest more in higher education and health care. In regards to this specific bill, rather than making across the board cuts to every agency regardless of how it impacts critical services, we think it makes more sense to cut over $500 million in corporate welfare. Companies that don't pay taxes are getting checks from taxpayers and we think the right course is to cut this spending and invest it in higher education and healthcare."

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