A SPECIAL AUDIT OF THE

Deb.Young

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A SPECIAL AUDIT OF THE


TELECOMMUNICATIONS SERVICES CONTRACT

BETWEEN

THE GOVERNOR’S OFFICE OF ADMINISTRATION

AND

ADELPHIA BUSINESS SOLUTIONS OF
PENNSYLVANIA, INC.


SEPTEMBER 23, 1998

THROUGH

OCTOBER 4, 2002




December 20, 2004
The Honorable Edward G. Rendell
Governor
Commonwealth of Pennsylvania
225 Main Capitol Building
Harrisburg, PA 17120
Dear Governor Rendell:
This report contains the results of our special audit of the Telecommunications Services
Contract (Contract) between the Governor s Office of Admi nistration (OA) and Adelphia
Business Solutions of Pennsylvania, Inc. (Adelphia) for the period September 23, 1998, through
October 4, 2002. This audit was performed under the authority derived from Section 402 of The
Fiscal Code, which states: Speci al audits of the affairs of all departments, boards, commissions,
or offices, may be made whenever they may, in the judgment of the Auditor General, appear
necessary. . . .
The audit objectives were to determine whether I) the Commonwealth complied with
laws, regulations, and policies in procuring telecommunications services for the Commonwealth
and awarding the Contract to Adelphia; II) the numerous amendments and/or change requests
to the Contract were justifiable, based on the terms of the Commonwealth s Request for
Qualified Contractors (RFQC), its amendments, and the Contract itself; III) Adelphia has
complied with the terms of the Contract, particularly those regarding the services to be provided
and installation deadlines and timeframes; and IV) the Commonwealth has procedures in place to
properly review billings, identify possible billing errors by Adelphia, and receive appropriate
credit for such errors in a timely manner. Our audit approach included inquiries of management
and staff at the Office of Administration, the Bureau of Commonwealth Telecommunications
Services, and the Central Services Comptroller s Office to obtain an understanding of Contract
monitoring procedures, change requests procedures, and billing statement and trouble ticket
processing procedures. We conducted our audit in accordance with Government Auditing
Standards, issued by the Comptroller General of the United States.There are four findings and a number of recommendations presented in this report.
Finding No. 1 discusses OA s and the Office of the Budget s refusal to provide certain
procurement information to the Department of the Auditor General (Department), and OA s
delay in furnishing other key documents that undermined the Department s ability to issue a
timely audit. Finding No. 2 discusses OA s failu re to include provisions in its RFQC for
telecommunications services that resulted in Contract change requests that cost the
Commonwealth more than $5.3 million.
Finding No. 3 describes OA s fa ilure to ensure compliance with Contract requirements,
and Finding No. 4 reports on OA s failure to adequately monitor Commonwealth
telecommunications billing statements.
Sincerely,
Robert P. Casey, Jr.
Auditor GeneralTABLE OF CONTENTS
Page
Executive Summary ....................................................................................................................... 1
Background .................................................................................................................................... 5
Audit Objectives, Scope and Methodology.................................................................................... 7
Finding No. 1 - The Office of Administration’s and the Budget Office’s Refusal to Provide
Certain Procurement Information, and OA’s Delay in Furnishing Other Key Documents,
Undermined the Department’s Ability to Issue a Timely Audit ................................................... 9
Recommendations......................................................................................................................... 15
Office of Administration Response and Auditors Comment ....................................................... 16
Auditors Conclusion .................................................................................................................... 21
Finding No. 2 - OA’s Failure to Include Provisions in its RFQC for Telecommunications
Services Resulted in Contract Change Requests That Cost the Commonwealth at Least $5.3
Million .......................................................................................................................................... 23
Recommendations......................................................................................................................... 31
Office of Administration Response and Auditors Comment ....................................................... 33
Auditors Conclusion 50
Finding No. 3 - OA Failed to Ensure Compliance with Contract Requirements ..................... 51
Recommendations 64ent ....................................................... 65
Auditors Conclusion .................................................................................................................... 78
Finding No. 4 - OA Failed to Adequately Monitor Commonwealth Telecommunications
Billing Statements ........................................................................................................................ 79
Recommendations......................................................................................................................... 82
Office of Administration Response and Auditors Comment ....................................................... 83
Auditors Conclusion 86
OA’s General Response ............................................................................................................... 87
Distribution List ........................................................................................................................... 90ADELPHIA
SEPTEMBER 23, 1998 THROUGH OCTOBER 4, 2002
OFFICE OF ADMINISTRATION
EXECUTIVE SUMMARY
FINDINGS SUMMARY
Finding No. 1 - The Office OA s and the Budget Office s refusa l to provide certain critical
of Administration’s and information to confirm that OA s $228 million Commonwealth
the Budget Office’s telecommunications services Contract was awarded in
Refusal to Provide Certain accordance with Commonwealth procurement laws and
Procurement Information, regulations substantially delayed the issuance of this audit.
and OA’s Delay in After two and a half years of foot-dragging and refusal, and only
Furnishing Other Key after we commenced litigation, did OA provide certain summary
Documents, Undermined scoring information and a copy of Bell Atlantic s losing
the Department’s Ability proposals. In response to our request for evidence to show that
to Issue a Timely Audit the evaluation committee complied with the RFQC Review and
Evaluation Criteria document, OA merely provided a
compliance certificate summarily certifying that the certificate
served as written confirmation that all required steps were taken.
Additionally, numerous meeting cancellations, unreasonably
long response times, and non-responsive, incomplete and
conflicting responses, also dramatically delayed the progress of
this audit. We waited as long as 168 days for a response to these
requests. On one occasion, OA said it had misplaced our request
for information. These delays in providing adequate information
and maintaining unsupportable legal positions erode taxpayers
confidence in state government and resulted in greater financial
cost to the Commonwealth and its taxpayers.
HIGHLIGHTS OF RECOMMENDATIONS
We recommend that OA retain sufficient and adequate documentation of the procurement
process, including scoring sheet information and copies of losing proposals, in accordance
with the Commonwealth s Procurement Code on retention of records. We also recommend
that, upon request, OA timely make available for inspection by the Department of the Auditor
General all procurement records, including scoring sheets and losing proposals.
1ADELPHIA
SEPTEMBER 23, 1998 THROUGH OCTOBER 4, 2002
OFFICE OF ADMINISTRATION
EXECUTIVE SUMMARY
FINDINGS SUMMARY
Finding No. 2 - OA’s Between April 2000 and October 2002, OA and Adelphia
Failure to Include initiated 99 Contract change requests (CRs) for
Provisions in its RFQC for telecommunications services. Of these, 27 had a reported cost
Telecommunications impact to the Commonwealth of more than $6.8 million. In the
Services Resulted in 10 CRs we selected for testing, we found that services requested
Contract Change Requests in eight CRs were not included in OA s RFQC. These CRs had
That Cost the a cost impact reported to be at least $5.3 million. The other two
Commonwealth at Least CRs were included in the RFQC but OA failed to recognize that
$5.3 Million the services were not included in Adelphia s Best and Final
RFQC Proposal (BAFO). Our review found that OA did not take
the time and effort to obtain information from Commonwealth
agencies about Business Partner (BP) Service connections to
access the Commonwealth network to conduct business; failed
to adequately plan Commonwealth Technology Center (CTC)
server farm security against intrusion; allowed Adelphia to
review security issues for a