State of Alaska Division of Legislative Audit

02-30058-11

June 06, 2013
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SUMMARY OF: A Special Report on the Department of Administration (DOA), Enterprise Technology Services Division (ETS), Telecommunication Procurement and Pursuit of New Technologies, May 4, 2011

Purpose of the Report

In accordance with Title 24 of the Alaska Statutes and a special request by the Legislative Budget and Audit Committee, we have conducted a performance audit of ETS’ core telecommunication services contract (core contract). The objective of the audit was to identify and report the annual cost for services covered under historic and current core contracts; compare the current costs to the expected costs; identify and report “solesourced” telecommunication contracts; ascertain whether it is the responsibility of ETS to provide new telecommunication technologies; and identify and describe ETS and state departments’ efforts in exploring new telecommunication technologies.

Report Conclusions

Core contract expenditures are not specifically tracked in the State’s accounting system to allow for reporting and monitoring costs, but they can be approximated. The approximate annual core contract expenditures were less than the $10 million a year contract maximum and less than the budgeted contract costs.

ETS issued 35 solesource contracts between FY 08 and February 28, 2011. Thirty of these contracts were licensing agreements for proprietary software, and five were for telecommunication services. All solesource contracts were approved by the State’s chief procurement officer. There was no solesource contract with the State’s core contract vendor during this period.

Alaska Statutes direct ETS to provide a telecommunication infrastructure, but there is no statutory requirement to provide new technologies. A survey of state departments determined that pursuit of new telecommunication technology is occurring both in departments and at ETS.

Findings and Recommendations

1. DOA procurement staff should work with the State’s chief procurement officer to ensure compliance with the “not to exceed” provision in the core contract.

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