The City Controller’s Office issued a scathing audit yesterday of Philadelphia’s Minority Business Enterprise Council, an agency that implements, monitors and enforces the city’s contractor diversity laws.
The audit found that the council lacked management controls and had inaccurate and incomplete records.
It also said the council failed to properly monitor contracts to ensure that companies owned by minorities, women and the disabled received a fair share of the millions of dollars the city spends each year for goods and services.
“In the 15 years I’ve been controller, it’s the worst audit I’ve ever seen,” City Controller Jonathan A. Saidel said.
Saidel said the problems at the council were particularly bothersome because the agency was not fulfilling its mission of creating a level playing field for people who have historically been the subject of discrimination.
The business council is one of several city agencies from which federal authorities seized documents last year as part of an ongoing investigation into suspected pay-to-play political corruption in the awarding of city contracts.
That investigation has led to more than a dozen indictments. Several of those indicted head companies that were certified by the council, including Janice Renee Knight, described as the girlfriend of Ronald A. White, a lawyer with political ties to Mayor Street; and Faridah Ali, the wife of Imam Shamsud-din Ali, another Street political supporter.
City officials yesterday sought to downplay the audit’s findings, saying that the Street administration is already working on correcting many of the problems.
“A lot of the things the controller suggested are done or are being done,” Street’s spokeswoman Barbara Grant said.
Last fiscal year, Street pumped $1 million into the troubled agency. This fiscal year, which began July 1, the administration has budgeted $1.85 million. In April, Street also appointed Michael P. Williams, a lawyer, as the council’s new director, replacing longtime director James A. Roundtree Jr.
Williams has restructured the agency’s management and is implementing a series of changes. For instance, he recently created an enforcement division headed by Wendy Staton, the council’s new enforcement deputy. He also is considering contracting out the certification process the council uses to determine if a company owned by a minority, woman or disabled person is “disadvantaged” so that it can be awarded contracts under the city’s diversity program.
“Way before the audit even came to our desk, we were on the road to successfully restructuring this department,” Williams said.
But while the administration may be addressing many of the recommendations raised in the audit, it will likely be some time before all of the controller’s concerns are remedied.
One of the audit’s major findings, for instance, was that of the 91 certification files randomly selected as part of the audit, 24 files were missing and 44 had insufficient documentation to support the disadvantaged certification the council made.
“The lack of appropriate management controls can allow businesses to improperly qualify for contract work,” the audit says.
The audit also found that while the council certified some companies as disadvantaged in less than a week, it took more than 200 days to certify others. It cited as an example Hoppergrass Ltd., a firm owned by Aruby Odom-White, which was certified in 26 business days.
Odom-White is the wife of Ronald White, who was indicted last month in the probe of alleged municipal corruption.
Odom-White used the certification to team with non-minority-owned firms to get lucrative contracts providing concessions at Philadelphia International Airport. But the audit says “there is little evidence in the file to suggest any meaningful review” of her application occurred.
The audit also takes to task City Council, the Street administration, and previous mayoral administrations for not setting standards to determine if the business council is achieving its goals of increasing contractor diversity.
“No one, including the MBEC management and staff, the mayor, members of City Council and other stakeholder. . . is aware of the extent to which the MBEC has made a difference” in the social and economic development of participating disadvantaged businesses, the audit says.