'Potential Fraud' Discovered in NYC Technology Contract

NYC Comptroller John Liu raises concerns about an $11.5 million technology contract between the city's Department of Consumer Affairs and Gartner Inc.

by / February 6, 2013

On Feb. 5, investigators were asked to examine an $11.5 million New York City technology contract following Comptroller John Liu's discovery of "questionable billings that could lead to 'potential fraud.'” the New York Post reported.

The contract in question was signed in 2007 with technology research firm Gartner, which was brought on to oversee an online payment system being built for businesses licensed by the Department of Consumer Affairs and other city agencies. The original contract, according to the Post, was for $2.7 million, but it has grown to $11.5 million with $10.4 million paid.

Liu reportedly charged Department of Consumer Affairs managers with being so obstructive that he "aborted the audit in midstream and sent his findings to the Department of Investigation," according to the Post. “These red flags are risk factors that signal potential fraud," Liu said, "and that’s what makes the agency’s interference especially troubling."

Findings of the aborted audit include a time sheet reportedly from January 2011 for a Gartner project manager who didn't begin work on the project until February 2012, and Gartner received $113,000 for specialized training of its CIO -- training that reportedly had nothing to do with the contract -- among other items. 

Liu’s audit chief explained in a letter to Consumer Affairs Commissioner Jonathan Mintz that "the level of obstruction by Mintz’s agency made the audit impossible," according to the Post, and a Gartner spokesman issued a statement saying that it “fully cooperated” with the comptroller.

A Department of Consumer Affairs spokeswoman called Liu’s report “irresponsible” and said the DCA “made each requested witness and every one of thousands of documents fully available.”

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