BOISE — The Idaho Office of Drug Policy hired a vendor to conduct a media campaign from 2015 to 2017 for $383,987 without competitive bidding, in violation of state purchasing policies, according to a newly issued state audit.
After the problem was identified — and the director of the office had been replaced — the office went through the required process, issued a request for proposals, and in December 2018 issued a new contract to the same vendor, Neighborhood All-Stars, a Boise boutique design firm that this time beat out four other competing firms and again won the contract.
The director has now changed again, and new Director Melinda Smyser, appointed to the post by Gov. Brad Little when he took office in January, has instituted new training and oversight requirements in the office for contracts, grants and financial reporting.
“You can’t have control on things that you weren’t involved in earlier, but you look at your path going forward and make sure that all processes and laws are followed going forward,” Smyser told the Idaho Press on Tuesday.
The “Be the Parents” media campaign included TV, radio, posters, postcards, coffee sleeves, billboards, and bus and newspaper ads. According to the audit, personnel in the Office of Drug Policy, which has a staff of five plus the director, misinterpreted an exemption for competitive bidding processes for “legal advertising” as applying to the campaign.
“They thought that that this advertising fell under ‘legal advertising’ — that is for legal notices,” said April Renfro, manager of the Legislative Audits Division.
Elisha Figueroa was the director of the Office of Drug Policy from 2012 to 2017. She left the Idaho Office of Drug Policy in May 2017 for a private-sector position, prior to the initiation of the audit of the agency. Nicole Fitzgerald headed the office from December 2017 to January 2019, when Smyser took over.
Laura Loftus, who with her husband, Toby Robin, operates Neighborhood All-Stars, said, “We were lucky to get ODP as a client several years ago, and honestly, we just love working with them. … Economically, they are one of our bigger clients.”
The new contract is for $332,130 and it runs through December 2019, according to the state Division of Purchasing.
Loftus said the contracting issue put the firm’s work for the Office of Drug Policy on hold for a while. “We are glad we won the contract,” she said.
Robin is a noted graphic artist whose illustrations festoon the exterior of the Record Exchange in downtown Boise. Both he and Loftus worked for the design firm Oliver Russell for years before they started their own business. Their clients have included Alley Repertory Theater, Story Story Night and Zoo Boise.
In her official response to the audit, Smyser noted that she was sending the office’s purchasing representative to an “Introduction to Procurement” course offered by the state Division of Purchasing “for which she has been wait-listed for several months.”
The audit also dinged the small state agency for a series of financial reporting errors involving improper coding of payments for the “Be the Parents” media campaign, with many of the payments improperly identified as payments to vendors for “rehab services.” Other expenditures also were incorrectly coded by department personnel from 2015 to 2017; though they were reviewed by the director and processed by the state Division of Financial Management, the errors weren’t caught.
Smyser noted several steps she’s taken to avoid such issues in the future, including organizing several meetings with staff and the Division of Financial Management about the issue; requiring a weekly transaction report; and instituting monthly communications with the division to verify coding discrepancies.
The audit also faulted the Office of Drug Policy for violating federal regulations on requesting “drawdowns,” or payments, from federal grants. Federal rules require those funds to be drawn only 72 hours before they’re spent, but the office collected $28,294 more than it spent in 2016 and $614,004 more than it spent in 2017. It also drew $1 million on June 29, 2017.
That large draw was requested “in anticipation of a federal government shutdown, which is not an allowable purpose,” the audit states. “Failure to comply with federal requirements may require funds to be returned to the federal grantor.” The office has received no such requests from the federal government for repayment.
In her response, Smyser outlined five strategies she’s put in place to “ensure this is no longer an issue in subsequent audits,” including specific training that a staffer who handles federal grants will undergo, and requirements for a signed report from the director before any transaction drawing down federal grant funds.
Before taking over at the Office of Drug Policy, Smyser was the director of the Idaho Department of Labor, a much larger agency with nearly 700 employees. She also represented Canyon and Gem counties in the Idaho Senate from 2009 through 2012.
Rep. Rick Youngblood, R-Nampa, co-chairman of the Legislature’s joint budget committee, said, “That’s the purpose of why we have audits, is because we want to make sure that we’re in compliance and that we’re doing the things that we’re supposed to be doing. These things do pop up occasionally, and we do try to work through the corrective actions, which I’m sure will take place with the new director.”
“I have nothing but extreme confidence in Director Smyser,” he said. “I know that she’s on top of them.”