Oklahoma director awarded contract to husband’s company, mishandled contracts, audit claims

An Oklahoma state audit published Wednesday found the state’s Office of Management and Enterprise mismanaged millions of dollars and led the attorney general to call on the secretary of tourism to resign.

The audit, first reported by Oklahoma’s local NPR station, was conducted by state auditor Cindy Byrd. The investigation, which dug into the state’s fiscal year ending June 30, 2022, aimed to “promote accountability and fiscal integrity in state and local government,” by examining whether the agency met compliance requirements for vendor contracts.

The report revealed that in 2019, OMES introduced “statewide contracts” that allowed companies to circumvent the state’s competitive bidding process, a mainstay in state procurement to ensure the most cost-effective use of taxpayer dollars. Such pre-screening is also used by other state governments to speed along IT purchasing, but the Oklahoma report questioned the contracts’ legality because OMES did not keep any written protocols outlining contracting standards.

Auditors recommended the agency create policies and procedures for these new contracts and submit them to the state legislature for review.

The report also found that OMES, which houses the state’s information technology functions, contracted the nonprofit Communities Foundation of Oklahoma to distribute $241 million in federal pandemic relief assistance, but the company mishandled $25 million of the federal assistance through “inflated administrative fees, undistributed grants, ineligible grants, unallowable bonuses, and inappropriate expenditures.”

The audit alleges that former OMES director Shelley Zumwalt, who is now serving as the state secretary of tourism, contracted a software company for $7 million while she led the agency without disclosing that her husband was the vice president until after she’d left that position.

Oklahoma Attorney General Gentner Drummond called on Zumwalt to resign following the audit’s release, accusing “wholly inappropriate and potentially unlawful” behavior, according to NPR.

Zumwalt denies allegations and told the media she will not resign.