Massachusetts State Auditor Diana DiZoglio has issued a new report on contracting and procurement related to the commonwealth’s emergency shelter system. The audit finds that the Executive Office of Housing and Livable Communities undertook “improper and unlawful no-bid emergency procurements for food and transportation services” between 2021 and 2024. According to the Democrat’s report, the unexpected influx of migrants in 2023 lead the EOHLC to bypass traditional procedures and enter into agreements that were neither fair nor transparent and resulted in overpayment. The EOHLC is defending its actions as “necessary, lawful, and effective” during a humanitarian crisis.
A day before the audit's release, Governor Maura Healey said Monday her plan to close all hotel shelters was six months ahead of schedule, with 32 remaining hotels expected to close this summer.
WAMC spoke with DiZoglio about her audit of the EOHLC and the office’s reaction.
DIZOGLIO: The Office of State Auditor audited the Executive Office of Housing and Livable Communities with respect to emergency shelter services with a focus on state contracting. It was raised to our office that a lot of people had concerns about the way that no-bid contracts in the millions of dollars were executed with state vendors. And we looked into some of those processes and procedures, and determined that some of these contracts were actually entered into in an improper and unlawful manner. With particulars surrounding Spinelli’s Ravioli and Pilgrim Transit, we identified that these no-bid contracts were executed for excessive timeframes and also resulted in excessive costs.
WAMC: To draw a contrast here, can you break down how the procurement process should have gone as opposed to what you found in the audit?
Look, certainly, everybody understands we're in a humanitarian crisis here and across this nation, and understanding that there are challenging times, we do understand that there are going to be situations that arise that need immediate attention in these particular circumstances. However, with respect to these particular contracts, a process could have and should have been followed. These contracts were executed roughly seven months into when the Executive Office of Housing and Livable Communities had data start to be compiled about what the circumstances were looking like, and there was a document that did exist with respect to the governor filing the state of emergency that did not explicitly waive procurement law as is required by regulation, and also, with respect to the emergency procurement process being followed, we would expect that that contract would be executed if it was no-bid for a matter of weeks, not a matter of six to eight months. That is simply a contract when it is for roughly eight months. It is not an emergency contract.
In the summary of the Executive Office of Housing and Livable Communities’ response to your audit, they push back against that pretty strongly and say that it's “fundamentally wrong for the State Auditor's Office to claim that there was no need for emergency procurements. The skyrocketing demand for emergency shelter was an unprecedented nationwide emergency which required an emergency response.” So how do you field a pushback like that from the office?
The administration understands that a process does exist pertaining to procurement, even in challenging circumstances, and we hope that they read through the recommendations and take up the opportunity to follow those processes and procedures moving forward. Unfortunately, instead, the administration has pushed back and claimed that there was really nothing wrong with executing no-bid contracts. Now, everybody understands that we have been facing an incredibly challenging time in this commonwealth. But that does not constitute that a free-for-all should exist with respect to millions of taxpayer dollars being executed without a fair and equitable process existing. When we asked the administration to provide us with documentation that could suggest that they did consider other options dutifully and look at other areas for cost savings to create a fair process, they could not provide us with documentation that could be evidential of that ever occurring, and simply suggested that they had had verbal conversations surrounding the execution of why and how these no-bid contracts got executed, and while we appreciate that they did respond to our audit, that is insufficient in terms of what taxpayers need to be able to trust that the process was lawful and ethical. Folks’ trust in state government is quite diminished in recent years, and we need to be doing everything that we can to help to instill public trust in these systems, and our audit provides a path forward to doing just that.
Now, looking ahead, obviously it was something of a unique circumstance, the period of time that this audit concerned, given the rare influx of migrants that Massachusetts experienced. What do you hope the long-term outcome is from this sort of audit?
We hope that hindsight is 20/20. We can't change past decisions. This audit does not exist to simply point to past missed opportunities or failures- It exists to shine a light on a path forward with recommendations for much needed improvements so that history does not repeat itself again. We fully understand the challenging circumstances that we are in here in Massachusetts, and we want to make sure that in working to address these challenging times, we are being as judicious as possible when it comes to spending taxpayer resources, and I do find it unfortunate that the administration has taken such a defensive posture against this audit recommendations, rather than welcoming these recommendations as a potential opportunity to do better on behalf of all residents of the commonwealth we are here to serve. We look forward to hopefully being able to partner with the administration on ensuring that these processes and procedures are updated so that we can help make government work better together.
