Audit: State board broke bidding rules

Friday, Feb. 20, 2004 | 11:49 a.m.

CARSON CITY -- The state Commission on Economic Development broke state laws and regulations in contracting with private companies, according to a legislative audit made public Thursday.

In one case, the audit said, the commission awarded a $210,000 advertising contract for a two-year period without going out to bid. State rules require an agency to seek at least three bids for that large of a contract.

The examination, presented by Deputy Legislative Auditor Stephany Gibbs, said that contract was then amended four times for a total cost of $494,000 over four years.

"Competition helps demonstrate contracts are awarded fairly and resources are spent efficiently and effectively," said the report accepted by the Legislative Audit Committee.

Assemblywoman Vonne Chowning, D-North Las Vegas, said it looks bad awarding a $210,000 contact without bids and that it is even more egregious when the total is $494,000.

"To the public, this is the thing that drives them crazy," Chowning said. "It looks like an inside deal or a sweetheart deal."

Bob Shriver, executive director of the Economic Development Commission, said the Nevada Film Office awarded the $210,000 contract to Marketing Synergists Inc. to promote the making of motion pictures in Nevada. The president of that company is Sharon Zadra, according to secretary of state records.

Shriver said Thursday that the commission properly solicited bids in the first contract. He said research by his agency could not find the documents that requested proposals. He said it was "unfortunately extended" for longer than allowed.

The audit said there were at least two other smaller contracts that were not put out to bid.

The examination found that money collected by the agency was held in the office anywhere from seven to 59 days until it was deposited in the bank. In eight instances receipts totaling $10,000 or more were held up to 27 days before deposit.

"Poor controls increase the risk that monies received might not get deposited or that the payers' bank accounts have been closed," the audit said. "Furthermore, untimely deposits reduce the state's interest earnings."

Assemblyman John Marvel, R-Battle Mountain, asked why money was held for 59 days in the office and if it was in a safe place.