Funds in Health Contract Shifted to Pay Consultants

Before McClure was hired under the ARTI contract, she had been working for the Maternal and Child Health agency for several months. She said the agency had sought her out based on her friend's recommendation, and she never was required to compete for the work.

McClure ended up working simultaneously as a direct consultant for the agency and as a subcontractor under ARTI for more than two years, through spring 2003. She billed $663,000 for work on agency initiatives, conferences and publications.

The spending problems at the small agency within the Department of Health went beyond the ARTI contract.

The city-issued travel and credit cards in Myrdal's name had been charged more than $1.1 million since 2001, making them among the most heavily used cards at any city agency. The credit card was intended for small incidentals needed at the agency, but it was used for balloons, artwork and a Sharper Image Sleek 3-CD Stereo. The card was used to buy 13 computers, a violation of the rules.

After The Post had requested some of her credit card records, the city took away the card for abuse in the spring, citing a $200 rental fee for a portable toilet at a going-away party for an employee in fall 2004.

The agency could produce no receipts for tens of thousands of dollars charged to the card. Myrdal said the card is widely used by other employees in her department.

Records were also missing or spotty for $300,000 in supplies the agency purchased through contractor Richard Evans.

Evans, a former massage therapist, opened an office-supply business out of his home in 2001. The business, New Columbia Solutions, has no warehouse or inventory, but it landed a series of blanket purchase agreements to provide Maternal and Child Health with promotional key chains, magnets and other handouts.

But in addition to those items, he billed the city for food, office supplies, computer equipment, furniture, televisions and other electronics, spending documents show.

But neither Evans nor the agency can produce records of how he was awarded the contract or any showing that the goods were delivered. Evans's invoices lack the detail standard on government records and list only broad categories, such as $7,000 for "various paper supplies." Evans said the supplies were delivered but he threw away the city's orders and records showing that he had purchased the items. He said he also deleted e-mails and other computer records.

Bryan Cheseman, the agency financial officer who oversaw the orders, said the goods had been received, and he said he was surprised when his staff couldn't find inventory records showing that. "I assumed they were keeping those," he said.

"This is not a banana republic," said agency spokeswoman Leila Abrar. "There has to be some paperwork, or someone should lose their job."

Deloras A. Shepherd, the deputy chief financial officer who oversees the D.C. Health Department, reviewed the invoices and said they should not have been paid because "they should have been purchasing only those items" in the promotional list.

The Health Department launched an investigation into spending at the agency after inquiries by The Post.

Myrdal, the head of the agency, said she was a "victim" of the financial problems because she "put too much trust" in Cheseman.

He pointed back at her, saying she had directed everything.

"The buck stops at her desk," Cheseman said. "I don't have that kind of power or control over how money is spent."

Staff researcher Bobbye Pratt contributed to this report.