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Editorial: Inspector general would be worth the cost to Idaho

Wed., March 25, 2015

Edit: This editorial has been changed to reflect the fact that Corrections Corporation of America did not acknowledge fraud in its settlement with the state of Idaho.

Idaho legislators probably will not hear HB 200, which would create an inspector general office, despite a new report finding the Department of Education has sunk $61 million into a dysfunctional statewide instructional management system.

The disclosure comes one year after the state’s $60 million contract with Idaho Education Network – this one let by the Department of Administration – was found illegal, exposing the state to millions in legal claims. The federal government had already cut off grant payments.

The U.S. Department of Justice is investigating that contract award. Separately, the FBI is conducting an inquiry into possible wrongdoing by the Corrections Corporation of America, which operated Idaho’s largest prison until last year.

There is a pattern here, but most of the 105 inspector generals in the Legislature – so-called by Rep. Joe Palmer of Nampa – apparently have not caught on.

An independent inspector general might have identified these problems before they became costly embarrassments. HB 200 would give the office limited scope and assure state Senate oversight. If there is a defect, it’s making the inspector an appointee of the governor. And the office would be within the governor’s office.

Gov. Butch Otter has, at best, stood by while these problems festered.

But these cases might never have developed if agencies had let the contracts properly at the outset. The bid award for IEN was clearly tainted. In the case of Schoolnet, the contract was awarded despite evidence the vendor and its product were not up to the task. The U.S. Department of Education was sufficiently concerned it refused to participate, as did the J.A. and Kathryn Albertson Foundation, twice.

The foundation finally bought in for $20 million only after passage of the Luna Laws, which voters subsequently repudiated. Schoolnet’s failure contributed to a foundation decision to redirect its support to noneducation endeavors. Its experience will almost certainly damage future Idaho efforts to attract nongovernment interest in state initiatives unless there are reforms.

Lawmakers began the process in 2013 and 2014 with legislation that directed the Department of Administration to improve bidding and management of contracts worth more than $5 million, which represent the bulk of state spending. Legislators are scheduled to discuss additional changes next week.

There’s still work to do.

Washington lawmakers restructured the state’s bidding process in 2011, creating the Department of Enterprise Services after a furor over construction of a new building far larger than needed. Implementation of the reforms is ongoing, with a July 1 deadline for certifying all state employees involved in letting or managing a contract.

The Idaho Legislature’s Office of Performance Evaluations, which did the Schoolnet report, also prepared 2013 and 2014 reports on contracts. The office has done a valuable service for Idahoans, but it cannot do what an inspector general might.

A few lawmakers are grousing about the office’s $350,000 annual cost. Losses from the bungled school contracts would pay its way for about two centuries.