U.S. Markets closed

Audit: W.Va. tower project ignored purchasing laws

CHARLESTON, W.Va. (AP) -- West Virginia's $38 million expansion of a statewide microwave communications network ignored state purchasing laws, legislative auditors said in a report released Tuesday.

The funding was part of a $126 million stimulus grant awarded to West Virginia to fund a three-prong plan to bring the latest broadband and telecommunication gear to a state where hilly terrain, low-income residents and other factors have stymied previous efforts. The plan includes building 12 towers and refurbishing five others to fill a gap in the microwave communication system for law enforcement and other first responders.

The report says the state grant implementation team didn't seek competitive bids for the tower project. Instead, they used a Lewis County Commission contract to authorize Premier Construction as the contractor. The county had hired Premier in 2009 to build one microwave tower in Roanoke.

State rules allow purchases through contracts issued by other public bodies, a practice known as piggybacking. But the report says state Purchasing Director David Tincher wasn't asked to approve using Lewis County's contract for the state project.

According to the audit, Tincher advised state officials to stop the towers' construction but that did not happen.

State officials also skirted purchasing laws by taking federal funding and giving it to the county to spend on state projects, the report said.

"Granting funds to the county rather than procuring the tower construction directly, while not technically illegal, did not align with Purchasing Division guidance and avoided the oversight of the Purchasing Division," the report states.

"This lack of Purchasing Division oversight enabled the contract to be noticed, bid and awarded in a manner inconsistent with the requirements of ... the West Virginia Code."

The report also said that the state mischaracterized Lewis County's contract with Premier as "competitively bid" and "fulfilling state requirements."

Legislative Auditor Aaron Allred released the audit Tuesday during a legislative interim committee, media outlets reported.

In response to the audit, Senate President Jeff Kessler and House Speaker Tim Miley said they have begun a review of state purchasing laws and the oversight of state grant funds. The review will determine whether new legislation is needed.

"I appreciate the gravity of the findings contained in the report from the Legislative Auditor's office," Kessler said Tuesday in a news release. "Ensuring the public's trust in how the state spends taxpayer dollars is my highest priority. That was the driving factor that led the Speaker and myself to initiate an interim study of state purchasing practices so that these type of the mistakes and existing loopholes can be fixed."

Miley said the audit shows the need for better state oversight of such grants.

"The Legislature and Governor strive to be vigilant stewards of taxpayer money, and in doing so, we will continually look at how we can strengthen the state's purchasing system."

An earlier audit released in February criticized the state for choosing high-capacity Internet routers to create network hubs at facilities such as public schools, libraries and community institutions.