**DRAFT**
COMMITTEE MEETING MINUTES
February 10, 2021
A meeting of the Senate Appropriations Subcommittee on General Government was scheduled for Wednesday,
February 10, 2021, at 3:00 p.m., in the 1100 Room of the Binsfeld Office Building.
The Chair called the meeting to order at 3:00 p.m. He instructed the Clerk to call the roll. At that time, the
following members were present: Chair Victory, Sens. Bumstead, and MacDonald. A quorum was present.
Minutes from the March 11, 2020, and November 12, 2021 subcommittee meetings were approved without
objection.
Senator Irwin arrived.
The Chair invited the following individuals to present testimony regarding the Office of the Auditor General
(OAG)'s COVID-19 Expenditures report dated January 2021:
Steve Kochay, Audit Manager, OAG
Nanci Svarc, Assistant Auditor General, OAG
Mr. Kochay and Ms. Svarc spoke on the findings of the Auditor General, which included two reportable
conditions. Procurement cards intended to be used by a single individual were used by multiple individuals.
OAG recommended that OAG strengthen its policies and procedures to protect against fraud and loss related to
vendor payments. The testifiers presented the report's findings to the subcommittee and explained circumstances
the OAG believes led to some financial losses and procurement card misuse while recognizing the special
circumstances of the pandemic and its effects on the market for personal protection equipment (PPE). The OAG
noted that a $4.9 million loss was prevented by the action of the financial institution. The OAG made
recommendations to improve continued operations at the Department of Technology, Management, and Budget
(DTMB).
Senator Victory inquired about what controls the DTMB was lacking to verify the receipt of PPE when making
purchases. Mr. Kochay responded that the urgency and need for making the purchases made it difficult to use
SIGMA, which would have reduced risk, and certain vendors required partial or full payment. Given the
volume of activity, the normal system for procurement purchasing was overwhelmed.
Senator Bumstead asked whether the state has received all the goods purchased with procurement cards and if
there were receipts available.
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Mr. Kochay pointed to the report's finding that the OAG could not confirm that all goods were delivered and
received for four transactions.
Senator Victory thanked the Office of the Auditor General for their work and invited the Department of
Technology, Management, and Budget to respond to the report's findings.
The Chair invited the following individuals to present testimony regarding the Office of the Auditor General
(OAG)'s COVID-19 Expenditures report dated January 2021:
Brom Stibitz, Director, DTMB
Jim Colangelo, Chief Procurement Officer, DTMB
Jared Ambrosier, Director of Enterprise Sourcing, DTMB
Brom Stibitz, Director, DTMB discussed the work of DTMB staff and the unusual and special circumstances
created by the pandemic which resulted in unique challenges to DTMB's usual policies and procedures.
Jim Colangelo, Chief Procurement Officer, DTMB, testified regarding the challenges the Department faced
when trying to procure PPE at the beginning of the pandemic. He noted the unprecedented nature of the
emergency and the difficulties of a broken supply chain, exhausted backup supplies, and a profusion of
counterfeit goods. He also noted that the state was competing with other countries to procure goods.
Jared Ambrosier, Director of Enterprise Sourcing, DTMB, testified about the normal emergency procurement
procedures at DTMB. He stated that the 2nd largest event requiring procurement involved roughly over 100
requests, while the COVID-19 emergency resulted in more than 10,000 requests. Mr. Ambrosier testified
regarding the DTMB's establishment of a COVID triage team of 10 professionals dedicated to securing and
testing PPE and supplies and services.
DTMB stated that they disagreed with Finding 1 in the OAG report, stating that the environment did not allow
for the Department to follow typical processes and could not rely on established cardholders. The Department
determined that group keycards would result in less risk and created a total six group keycards. Two of these
were effectively not used after a short period of time. The cards were used for PPE and testing supplies and sent
to hospital locations or delivered to a central warehouse or alternative care facility. Each card was reviewed
daily by the cardholder, supervisor, and keycard administrator. Shared cards were closed or effectively disabled
by mid-July 2020. The Department stated that receipts were available and had been provided on all transactions.
DTMB stated agreement with Finding 2 of the Auditor General's report. While extensive emergency planning
procedures were in place, the state did not have plans for an event on the scale of the pandemic, although the
Department had previously identified a pandemic emergency as a gap in its emergency planning and had a
practice planned for the summer of 2020. The Department admitted that there were not warehouses and staff in
place.
Senator Victory congratulated the Department on their efforts. He called attention to Page 7 of the OAG report
which found no evidence of fraud or abuse and asked about losses incurred. The Department responded that the
State did incur a loss of $25,000 but a total loss of $4.9 million was prevented.
There being no further business before the committee, the Chair made a motion, supported by Sen. Bumstead,
to adjourn the committee at 3:43 p.m. Without objection, the committee was adjourned..
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