| Official suggests audit of tech company that received $2.8M
by Andy Phelan
andy@dekalbchamp.com
A top government official at the center of controversial overspending on technology consultants, said a company that received more than $2.8 million on a $50,000 contract from DeKalb County should be audited.
According to documents obtained through open records, G4 Enterprises Inc., one of a dozen technology firms flagged in an independent audit as “grossly overpaid” by DeKalb County between 2004-2008, reported annual revenue of $5,000 each year in 2004, 2005 and 2006 on its business license applications.
But check disbursement records, also obtained through open records, shows that the firm received more than $2.2 million in payments from DeKalb during that time span.
In all, G4 was paid $2.8 million from 2004 to 2008, but records show it had just one $50,000 contract in 2004 that was automatically renewed for two years. In Jan. 2008, the board of commissioners approved a contract to rehire G4, and then fired them in May “due to non-performance.”
Executive Assistant Richard Stogner, who answers directly to CEO Vernon Jones, approved many of the payments to technology firms, including G4, which led to more than $22 million spent that circumvented county law. The payments resulted in the Information Systems Department overshooting its 2006 budget by $1.4 million.
When asked to comment on payments made to G4 and its reported annual revenue, Stogner, who defended many of the payments as legitimate because G4 and other companies had federal and state contracts, said that “doesn’t sound right.”
“I’d audit their [G4] books,” said Stogner. “Where’s all that revenue we paid you?”
Numerous calls made to G4’s Chief Executive Officer David Gallemore for comment have not been returned. But on its Web site one of the company’s goals is “doing what we said we were going to do in an ethical matter at all times.”
G4, originally hired in 2004 to provide technology consultants for various projects, has offices in Atlanta, Charlotte, Birmingham and Washington, D.C., according to its Web site.
Also disclosed in the open records report was that G4 did not have a county or municipal license to conduct business here in 2008.
However records show the company did have a valid business license in Clarkston for 2007, but did not have one for 2008. Business licenses are required for tax purposes. If a business has a license in any one of DeKalb’s cities, it also allows them to do business in the county.
Through a spokeswoman, Finance Director Michael Bell said G4 had a license in Clarkston, but city clerk Tracy Ashby said she had no record of a business license for the firm in 2008.
Stogner also indicated that it is his understanding that to do business in the county you must have a DeKalb business license.
“I assume anyone whose doing business here should have a license,” he said. “Again, sounds like it should be audited.”
The company was paid more than $65,000 by the county in 2008, but there is no record of it holding a valid business license in DeKalb.
Stogner approved many of the questionable contracts and purchases by pushing through payments to particular vendors in a process dubbed “Kiss and Ship,” said independent auditor KPMG in a report issued in March.
“Employees within the contracts department said they would receive fully executed contracts with a memo from the executive assistant [Stogner] requesting a number be assigned to the contract,’ said KPMG Managing Director John C. Sullivan.
“Employees called these informally Kiss and Ship,” said Sullivan. “Pay the invoice and send it out.”
In G4’s case, in 2006 on a $50,000 annual contract, the firm received a $147,000 check on April 20, 2006, in three payments of $49,350, $49,920 and $47,840.
Two months later on June 6, 2006, G4 received five payments -- $52,269, $6,130, $49,749, $49,749, and $52,269 -- totaling $210,196.
Known as “bid-skirting” or “splitting” purchase orders, the practice is used to achieve lower dollar limits either to avoid the bidding process or laws that require the approval of elected officials, such as a board of commissioners.
In DeKalb County’s case, all contracts and purchases greater than $50,000 must be competitively bid, and all contracts and purchases more than $100,000 must first receive board approval.
Contracts and purchases over $50,000 do not have to be formerly bid if the vendor has existing contracts with the state of Georgia or the federal government at the time of purchase.
According to Finance Department records, G4 had a federal contract, but that does not preclude them from having a county contract when it’s doing business with DeKalb.
While Finance Director Bell indicated through a spokeswoman that G4 was doing other work for the DeKalb Water and Sewer Department and the county Tax Assessor’s Office, only the 2004 technology contract could be documented.
Bell, through a spokeswoman, said he could not answer any follow up questions because he was advised by the Law Department not to speak with The Champion reporter due to a potential criminal investigation by the district attorney.
The open records disclosure comes as District Attorney Gwen Keyes Fleming is still exploring the possibility of convening a special grand jury to investigate the IT contracts and possibly others.
CEO Jones and Stogner continue to insist that the independent audit by KPMG found no wrongdoing but the firm said they were not asked to find intent. KPMG also said they do not under the law have the subpoena power needed to conduct an in-depth investigation.
“We’re still trying to evaluate and determine how broad the problem before commenting prematurely,” said Keyes Fleming through spokeswoman Jada Hudspeth.
Then March-April seating of the DeKalb County grand jury recommended a future “investigation of both piecemeal and no-bid purchasing practices of DeKalb County Executive Assistant Richard Stogner.”
“The DA wants to see if this is a problem solely within the information systems department or whether other departments are involved as well,” said Hudspeth.
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