Audit chides Wake Tech official

RALEIGH - A state audit found that a top official at Wake Technical Community College violated its purchasing rules by fabricating a losing bid for electronic equipment and then steering the contract to a "personal friend" of the school's second highest ranking administrator.

The findings, released Monday by the office of State Auditor Les Merritt, are the result of a review of purchases made by the college's Information Technology Services Division over the past two years.

The outside audit was requested by Wake Tech President Steve Scott, according to the report.

Auditors raised concerns about two contracts totaling $20,364 handled by the college's executive vice president, Tommy Rhodes, and its chief information officer, Darryl McGraw.

Both men are still employed at the college, and no disciplinary actions against them, if any were taken, have been made public.

The first contract questioned in the report involved $9,964 in multimedia equipment purchased from a local company last year for use in the boardroom used by the college's senior staff. Under Wake Tech's purchasing rules, three "legitimate quotes" must be gathered before the purchase can be approved to help ensure the public institution is getting the lowest price available.

The documentation supporting the winning contract included a losing $11,670 quote from a competing company that later told auditors it had submitted no such bid. That company had previously provided a quote on equipment for a similar job to outfit a classroom, and the auditors suspected the older quote had been doctored for inclusion in the packet for the boardroom job to meet the required number of solicitations -- a violation of purchasing rules.

Asked if he had altered the quote, McGraw initially denied any knowledge. He later admitted to an auditor, however, that he had used prices gathered on the Internet to create the quote, an act the report said "undermined the integrity of the procurement process."

In a second purchase, multimedia equipment required for a training seminar was bought for $10,400 after collecting only one quote -- from the same company involved in the earlier deal.

The purchase violated rules included in the college's Budget Policy and Procedures manual, according to the audit. The manual had been written only two months earlier by a committee co-chaired by McGraw, meaning he should have been aware of the rules he was breaking, the report said.

Expenditures of more than $10,000 require the direct approval either of the college's two top administrators -- Scott or Rhodes. In the case of the electronics purchase, the approval form was signed by Rhodes.

In an interview with the auditors, according to the report, Rhodes admitted he signed off on the deal despite a "personal relationship" with the owner of the company that got the contract. The business owner, whose name was not disclosed in the report, is "a personal friend" of Rhodes, the report said.

Copies of the invoices involved in the audit identify the firm hired to provided the electronics equipment as Sirtage Inc. of Raleigh. State corporation filings list John C. Stuart as the firm's president.

The college did not have a specific policy covering conflicts of interest, but the state auditors wrote that the college's second highest ranking administrator should "refrain from approving purchases from companies in which he may have a personal relationship, regardless of the amount."

In a written response signed by Robert Zippay, the chairman of Wake Tech's board of trustees, the college indicated that Scott had taken "appropriate disciplinary action with respect to the CIO in accordance with college policies."

Public records show that McGraw, who has worked at the college since March 2005, has kept his job and $113,100 annual salary.

Wake Tech spokeswoman Laurie Clowers said Monday she could not discuss whatever disciplinary actions might have been taken against McGraw, citing concerns about employee privacy.

"We're going to let the audit speak for itself," Clowers said.

The report indicates no action taken against Rhodes, though the college said in its written response that it had developed a new purchasing policy governing potential conflicts of interest and that "senior level administrators" had been required to enroll in an ethics training course.

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