New York State’s Office for Technology wasted millions of dollars due to a cultural disregard for finance laws and procurement rules under the leadership of former state CIO Melodie Mayberry-Stewart, according to an audit released by the state comptroller on Tuesday, Feb. 28.

The state’s examination also linked ex-deputy CIO Rico Singleton — currently the CIO of Baltimore — to alleged violations while he worked for New York State. The comptroller said Singleton may have violated ethics policy by pursuing a job with antivirus software provider McAfee for himself and his live-in girlfriend as he negotiated a contract with the vendor that was finalized in 2009. As evidence, the audit published email correspondence between Singleton and a McAfee employee.

Tuesday evening, The Baltimore Sun reported that Singleton resigned as the city's CIO, and Mayor Stephanie Rawlings-Blake called the allegations of misconduct "deeply troubling."

On Feb. 29, a Times Union blog reported that Melodie Mayberry-Stewart resigned from TRI Holdings.

The audit also alleged that Singleton accepted improper travel benefits from McAfee on more than one occasion, including for an invitation-only event featuring Gen. Colin Powell. The comptroller referred its findings on Singleton to the state’s Joint Commission on Public Ethics.

Furthermore, the audit found $1.5 million was wasted on the aforementioned McAfee contract when the state was unable to recoup enough licensing fees from agencies through the contracted service, which consolidated antivirus and security products for state agencies. The three-year, $5.7 million contract was canceled after one year.

Singleton said in a 2009 interview with Government Technology that it otherwise would’ve cost the state $32 million for the level of protection afforded by McAfee’s all-in-one product.

Stronger Controls

Daniel Chan, a longtime agency CIO, was named New York’s acting state CIO after Mayberry-Stewart stepped down last year. Chan’s Office for Technology said in an email statement on Tuesday that it will enact stronger internal controls in consideration of the comptroller’s audit.

“Going forward, [the Office for Technology] will require staff to document to its Contracts, Procurement and Finance office compliance with all procurement planning and purchasing procedures at the time a procurement is proposed,” according to the statement. The office also will expand its ethics and procurement training, officials said.

The Office for Technology (OFT) said it participated fully in the audit, and it acknowledged “serious misconduct” by its former executives.

“Mr. Singleton’s misconduct constituted a derogation of his authority and an intentional disregard of his duties,” the Office for Technology statement said. “The Comptroller learned of Mr. Singleton’s misconduct from information obtained through third-party emails, which were unavailable to OFT management.”

Inappropriate Spending

The audit cited several other examples of wasteful or inappropriate spending under the former state CIO, including a $49,999 contract given to a Web design firm called New Concepts Consulting — $1 below the state’s limit for contracts requiring the comptroller’s approval — that the audit said appeared to be awarded based on “favoritism.” “This company previously did work for an Ohio Foundation chaired by CIO Mayberry-Stewart prior to her New York State employment,” the audit reported.

“We found a culture, emanating from the highest levels of the agency, that disregarded the New York State Finance Law, the State’s Procurement Guidelines and OFT’s own procurement policies,” the text of the audit said.

The audit faulted the state Office for Technology for inadequate or inappropriate procurement practices, including unnecessary no-bid contracts, improper termination of contracts and rushed project timelines, and improper discretionary spending.

Mayberry-Stewart and Singleton didn’t respond immediately on Tuesday to requests for comment from various media outlets. Before these allegations surfaced, Mayberry-Stewart stepped down as state CIO in March 2011. She is currently listed as CEO of TRI Group Holdings. Singleton, meanwhile was named Baltimore’s CIO in December 2010.

Rejected Deal

New York State Comptroller Thomas DiNapoli initiated the full investigation of the state’s technology procurement and contracting after DiNapoli’s office, in 2010, rejected a $7.5 billion contract the Office for Technology awarded to Tapfin Process Solutions, a subsidiary of Comsys, for staff augmentation services.

Government Technology reported at the time that the idea was that a statewide pool of subcontractors would help the state save $40 million by leveraging its buying power and preventing agencies from searching separately for IT staff augmentation consulting services. But DiNapoli killed the deal, calling it bloated and a waste of taxpayer dollars.

This story was updated to reflect Singleton's resignation as Baltimore CIO, and Melodie Mayberry-Stewart's resignation as CEO of TRI Group Holdings.

Matt Williams  |  Associate Editor