DSS Mum on $6 Million Contract for Consulting Firm

October 15, 2014

Investigative Reports

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SC DSSA consulting firm hired by ex-state Department of Social Services Director Lillian Koller when she earlier headed Hawaii’s social services agency received more than $10 million while in the Aloha State, and obtained a $6 million contract in South Carolina after Koller transferred here, records show.

And the South Carolina contract is on top of a $719,000 “emergency” procurement that DSS obtained for Benton & Associates Ltd. of Ellicott City, Md., which the S.C. Legislative Audit Council described as “improper” in a critical audit of the agency released earlier this month.

The audit found that a contract between DSS and Winthrop University for $20 million and two other contracts between DSS and the University of South Carolina for $50.8 million were the “result of non-competitive procurement methods.” That reduces the “probability that the vendors selected were the best combination of quality and price,” and also can “create the perception that contract awards are based on favoritism,” the audit noted.

Of the $20 million awarded to Winthrop University, $6 million, or 30 percent, will go to Benton & Associates if the firm fulfills the terms of its contract, Winthrop spokesman Jeff Perez told The Nerve last month. In a written response to The Nerve on Oct. 6, Perez said the firm to date has been paid $5,152,016, or nearly 86 percent of the total projected contract amount.

An initial cost proposal submitted in August 2011 by the Benton firm to the S.C. Budget and Control Board’s Procurement Services Division estimated annual costs, including wages, airfare and lodging, at $600,000, for a total of $3 million over the proposed “five-year life of this procurement.”

But a contract change order dated Oct. 17, 2012 – about 19 months after Winthrop and DSS signed a memorandum of understanding for the public university in Rock Hill to provide training and technical assistance to DSS – shows that the “total potential value” of the Benton firm’s contract was increased to $6 million from $3 million, according to a copy of the change order obtained last month by The Nervefrom Winthrop under the S.C. Freedom of Information Act.

No reason was given in the change order for the 100 percent hike. The document shows a pay scale, effective July 1, 2012, for 11 named consultants ranging from $72.07 per hour to $237.32 per hour; the average hourly rate was $189.79.

DSS has faced a barrage of criticism this year from some lawmakers over understaffing in its child welfare division and child abuse deaths. To put the $6 million contract for the Benton firm in some perspective, DSS could have hired 120 child case workers with that amount, based on an annual salary and benefits of $50,000 per employee.

DSS spokeswoman Marilyn Matheus did not respond to two emails sent by The Nerve in August and last month seeking answers to the following questions about Benton & Associates:

  • The specific purpose in hiring the firm;
  • Length of contract;
  • Total projected cost of contract;
  • Source of payments (state, federal, other funds); and
  • Payments to date

Given the agency’s non-response to the emails, The Nerve last week submitted a formal request under the Freedom of Information Act for copies of all contract documents and related records involving DSS and the Benton firm. That request is pending.

Bill Benton, who identified himself in the 2012 contract change order as the company’s vice president, declined comment when contacted by The Nerve last week, saying only, “I think you should get whatever you need from DSS. I appreciate the call; goodbye.”

In an August 2011 technical proposal submitted by Benton to the Budget and Control Board, the firm, which incorporated in 1993, described itself as a small “boutique” organization that has “developed a national reputation in the highly specialized area of human services management and finance,” and is “sought after by state and local governments to provide personalized services.”

“We prefer engagements that enable us to establish and maintain long-term relationships with clients whose values we share,” the proposal stated.

BCB spokesman Scott Hawkins provided the document and related records to The Nerve on Monday afternoon.

As for the initial “emergency” contract with DSS in 2011, the Benton firm’s proposal noted that work involved the “drafting of requests for proposals to maximize Federal revenues, improve the State’s child welfare services, increase the effectiveness of welfare-to-work programs, and strengthen the partnership between DSS and the State’s public universities.”

In seeking a separate contract with DSS through Winthrop University, the Benton firm proposed assisting the university with two “task orders” – one related to DSS’ federal Temporary Assistance for Needy Families (TANF) program, and the other related to the agency’s federal Social Services Block Grant (SSBG) program.

Koller was listed in the Benton proposal as a client reference for the Benton firm.

Koller, who served as director of the Hawaii Department of Human Services from 2003 to 2010, hired Benton & Associates on a contract basis from 2004 to 2010, Kayla Rosenfeld, spokeswoman for the Hawaiian agency, told The Nerve in a written response last month.

The Benton firm received $10.26 million during the contract period, of which $5.93 million was in state general funds and $4.33 million in federal funds, Rosenfeld said.

Asked what specifically the company did for that amount, Rosenfeld replied, “The current DHS administration cannot speculate as to why Ms. Koller engaged Benton & Associates to perform work on behalf (of) the DHS.”

The 2011 Benton proposal submitted to the Budget and Control Board noted that Benton’s work in Hawaii “focused on generating additional Federal revenues for the Department of the Attorney General and the Department of Human Services.”

Gov. Nikki Haley appointed Koller in 2011 to run DSS, but Koller resigned in June amid a firestorm of controversy over the agency’s handling of child welfare cases.

In its audit publicly released on Oct. 3, the Legislative Audit Council – the investigative arm of the General Assembly – found, among other things, that:

  • The state has child welfare caseloads that are “excessive and inequitable from county to county”;
  • DSS hasn’t ensured that its staff is “well-qualified and compensated competitively when compared with similar positions in South Carolina and other states”;
  • There is not “an adequate system for screening, investigation, treatment, and placement of children in safe homes when abuse and neglect are reported”; and
  • Not all “violent, unexpected, and unexplained child fatalities are being reported and reviewed as required by law.”

The day before the release of the audit, DSS announced it had given a 10 percent raise to child case workers and planned to hire 221 case workers by Nov. 1.

The Nerve in July reported that DSS had been flush with reserves in recent years amid case worker shortages. The agency for example, carried over nearly $17.5 million in “other” funds into fiscal 2013, and about $4.8 million in general funds into the start of last fiscal year.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.