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Ky. Department's Lax Oversight Of Technology Contract Assailed

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The state auditor in Kentucky has criticized the state education department for lax oversight of a multimillion-dollar contract to design a plan for providing the state's schools with computers and other educational technology.

At a press conference late last month, State Auditor A.B. Chandler charged that because of slipshod accounting by the department, it was impossible to tell whether the Digital Equipment Corporation was being held accountable for the accuracy of the amounts it was charging the state for services.

Digital has an open-ended contract to design a system to electronically link all of the state's 1,400 schools, their administrative offices, and the department. The six-year, $400 million program represents a major component of the state's landmark school-reform law. (See Education Week, May 13, 1992.)

"What [the department] did, basically, was take Digital's word for it,'' Mr. Chandler said. "The provisions of [the contract] are too loose, far too loose for a contract that is entered into on behalf of the taxpayers.''

The press conference followed a special legislative session in which lawmakers voted to strip the department of its oversight of the Digital contract. The state Finance and Administration Cabinet, which oversees data processing for other state agencies, was given day-to-day responsibility for managing the contract.

In return for the switch in oversight, lawmakers also agreed to raise the limit on the Digital contract from $2 million to $10 million a year.

Shortcomings Acknowledged

Under the terms of the contract, Digital receives no specified compensation. It is instead paid hourly rates that range from $30 to $250 depending on the skills needed to perform a given task.

As of Jan. 31, the auditor said, Digital has received a total of $1.29 million for services rendered under the contract.

Among questionable items cited in the auditor's report was a payment of $37,000 for travel and living expenses in excess of the $101,000 that Digital had requested.

Another $1,124 in expenses that had been disallowed by the department was mistakenly paid, according to the report.

Jim Parks, a department spokesman, conceded that an accounting of expenses requested by the special session of the legislature had never been submitted and that documentation in some cases may have been lax.

"Our response to that report was not negative,'' he said.

In answer to the auditor's charges, a Digital spokesman said the company had provided the necessary documentation to the education department and denied any overcharges.

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