A fifth of all state money goes to vendors – here are the top 10

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$57 million spent on Bank of America cards

Vendors made billions of dollars selling goods and services to the state of South Carolina last year, according to data compiled by the comptroller general’s office — about $5 billion in all. That’s roughly one-fifth of all state appropriations.

Leading the list: Blue Cross Blue Shield of South Carolina. It was paid about $1.5 billion in fiscal year 2016, which ended in September of that year.

That marked a hike from fiscal year 2015 of about 6 percent, when Blue Cross Blue Shield again led the list with payments of $1.41 billion. The nonprofit health insurer has been the state’s largest vendor for some time now.

We sometimes talk about “pass-through” agencies, such as the state Department of Education. The legislature gives the DOE money, and DOE makes sure (in theory at least) that most of it reaches schools. One way to look at the whole of state government is also as a pass-through agency: The state takes in money from taxes, fees, and the federal government, and spends it on employee and retiree benefits and other goods and services.

The top-vendor information has been released annually since 2012 as part of a transparency initiative by the comptroller general “to show which individual firms receive the most state business.” (State-supported colleges and universities are not included on the list because they have their own accounting systems.)

These are the top-10 highest-paid vendors in fiscal year 2016:

  1. Blue Cross Blue Shield of South Carolina: $1.5 billion
  2. Catamaran PBM of Illinois (provides pharmacy benefits): $452.6 million
  3. Express Scripts (provides pharmacy benefits): $390.8 million
  4. Bank of America: $57.5 million
  5. R. L. Bryan Co. (printing): $56.5 million
  6. Sloan Construction: $52.2 million
  7. Palmetto Paving: $42.2 million
  8. Satterfield Construction: $41.3 million
  9. Minnesota Life Insurance: $39.7 million
  10. The Lane Construction Co.: $38.8 million

The payments to Catamaran and Express Scripts, like those to Blue Cross Blue Shield, were all made by the Public Employee Benefit Authority (PEBA), which is now spending more than $2.3 billion a year on healthcare for state workers and retirees.

The payments to Bank of America are for Visa “purchase cards,” which function like credit cards for agency employees. Last year they were used by 78 state agencies, to acquire everything from software to laundering to car repairs. The biggest spender on the cards in that time was the Department of Transportation, using them to buy $17.6 million in goods and services, including more than $1.8 million in office supplies alone.

The payments to the R.L. Bryan Company, like the Bank of America payments, don’t all stay with the vendor. They were all made by the Department of Education to the Columbia-based firm, which acts as a clearinghouse for instructional materials — textbooks, workbooks, software, and the like — from multiple suppliers.

There are two big vendor categories here. One is payments for state employee and retiree benefits. That includes the payments to Minnesota Life, also all made by PEBA. Together they account for nearly half of all vendor payments.

The other is roads contractors typically hired by the Department of Transportation, such as Sloan Construction, of Duncan; Palmetto Paving, of Conway; Satterfield Construction, of Greenwood; and the Lane Construction Corp., with offices in Columbia and Orangeburg, among many others. Almost all of the payments to those companies were made by DOT.

Also notable, at 16th on the vendors list last year, is payments to Boeing, of $29 million; the year before, Boeing was eighth on the list with payments of $38 million. The payments were made in both years by the Department of Commerce for “Construction: Buildings and Additions.” They’re portions of the reimbursement for Boeing phase II expansion, of up to $120 million, approved by the Budget and Control Board in 2013.

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  • GusPhilpott

    The widespread use of Bank of America credit cards is an area ripe for abuse. How many personal meals, clothing, personal travel, personal car fuel and repairs are charged every year? What are the safeguards for the public money? Cash advances? Is the wolf watching the hen house?

    • Steve Haynie

      The Comptroller General’s office makes those credit card charges available for us to see. If you want to look them up they are there.

      What I have seen have been charges made at hardware stores, office supply stores, and occasional grocery store purchases consistent with food supplied at public events. At a glance it appears most state employees with state credit cards are careful with the public money. The abusers are going to be the ones who are hard to catch because it is like looking for a needle in a haystack.

    • Tim

      As Steve said they are available on-line. Each month is a separate pdf file sorted by institution and then by first name.

      There is certainly potential for abuse and there have been some arrests of card holders. The cards are limited by merchant class code and various other controls such as archived receipts, but as with all things those who are truly determined to get around them will.

      Overall the program does have benefits though since it allows employees to make small purchases without sending it through accounting which would add hundreds of dollars in man hours without much in the way of fraud prevention since they don’t bid or request quotes on the smaller purchases anyway.

  • Patricia Wheat

    Another very troubling aspect is that SCs money and credit is not in SC where the pe
    ople benefit from it and the interest paid but is in NY Wall Street and intl banks so others benefit. Why not place our money in any one if the Dout Carolina banks ?? There are several.
    Bank of America is the worst place to keep money since their agenda is anti American pro globalism.
    Move it home. Better yet, comply with the Constitution at least as an option for those who want constitutional money.
    Art 1 sec 10 : No State shall…..make any Thing but gold and silver Coin a Tender in Payment of Debts;
    With todays technology, pos transactions could be done with cards, the State benefit from profits both as the wholesale middleman to the banks and in leasing colocation space to the banks in a State secured facility.
    Weve got to have money that we can defend. Digits in a Wall Street computer are not defenseable. Too many people are getting wiped out by computer key strokes.

  • Criminal SC Government

    Organized Crime.

  • Marion1

    Why are we paying for Boeing construction and not its owner? Is it owned by the government? What benefit do taxpayers receive from it? If I do not receive a direct benefit, then I do not pay for it.

    • Robert Meyerowitz

      Because the state agreed to give Boeing over $100 million that it borrowed, in Boeing’s most recent expansion phase — there’s a link to the minutes in the story, the last link, I believe. In return, Boeing promised to invest even more in its operations and hire thousands more workers in North Charleston, which it apparently has done.

  • BC&BS= Crony corruption

    BC&BS being “non profit” is a sad joke…there’s a reason California stripped the of their tax exemption and why there’s TWO federal anti trust lawsuits for ” “cartel-like” operations limit competition and drive up premiums.”

    They are a nasty company.

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