The D.C. Department of Human Services has called in Coopers & Lybrand, an independent accounting firm, to do an audit and management study of drug service contracts as part of an effort to fend off charges of favoritism in contracting, DHS Director David E. Rivers said yesterday.
The action comes at a time when the department's Alcohol and Drug Abuse Services Administration (ADASA) has come under criticism concerning the number of contracts it has awarded on a noncompetitive basis and the effectiveness of its treatment programs.
ADASA runs about two dozen drug and alcohol abuse prevention and treatment programs serving about 12,000 persons a year.
Rivers also said he will ask the D.C. police department to conduct a criminal investigation into evidence that an ADASA employe or employes were involved in a scheme to defraud the agency by issuing a false purchase order for $1,428 for a nonexistent medicine.
Meanwhile, the director is having his staff check into allegations made in an anonymous letter to Mayor Marion Barry that a $26,679-a-year procurement analyst falsified her resume. The letter also alleged that the analyst was hired as a favor to a politically well-connected DHS contractor.
Rivers, who denied the favoritism allegation, created a stir within the department this week when he met with a group of about a dozen women to discuss the anonymous letter. According to a source, Rivers talked about firing the author of the letter if it could be determined who wrote it.
Rivers, in a later interview, said that the procurement analyst had been harassed and that if the charges against her proved false he wanted to take action against those harassing her.
Rivers said he is negotiating with Coopers & Lybrand, the accounting firm that acts as the District's independent auditors, to audit selected ADASA contracts to see if proper payments were made.
The specific contracts to be audited have not yet been selected, but they will include both nonprofit and for-profit providers and most likely will cover the larger contracts, the director said. ADASA's largest contract, for $2.17 million, was awarded to A.L. Nellum for a residential treatment program on the grounds of St. Elizabeths Hospital, and an internal ADASA report criticized the per-patient expense of the program.
Contract records show the agency had 34 contracts worth a total of $6.3 million in fiscal 1985, and that $5 million of these were renewed for fiscal 1986 without rebidding.
Rivers said he also plans to change the method of paying contractors so that each will be paid the same amount per patient per day for the same type of service.
Now, the department requests proposals for services and evaluates them on the basis of a number of criteria, including cost. Under the proposed system, the city would say what it would pay per patient and ask the providers to specify what services they would offer at that payment level.
The fraudulent purchase order that Rivers said he will ask police to investigate was written out for "Tamer," a nonexistent substance, supposedly to be purchased from a company called Beta Systems Technology with an address listed as 4324 Georgia Ave., Rivers said. ADASA Administrator Lonnie Mitchell's signature was forged on the document, according to Rivers.
"We have reason to suspect possible criminal violations" by one or more employes, the director said, adding that the department's internal controls discovered the alleged scheme. No money was paid out to the company, he added.
Rivers downplayed the allegations in the anonymous letter about the procurement analyst, saying that he believed them to be a result of "petty jealousies" within the department. He said his staff would verify the analyst's employment history but that DHS procurement employes also were being interviewed to try to determine who was harassing her. The employe, reached at her office, declined to make any comment.