City contractor gets money for nothin

So how do three different city of Philadelphia departments pay a million bucks for work never performed over a four-year period and somehow not know it?

That’s the critical question raised by charges lodged Monday against a Barry Jones, owner of a Haddonfield, New Jersey IT firm named Mara Management Services. The case was originally investigated by city Inspector General Amy Kurland and then referred to the U.S. Attorney’s office for prosecution.

The charges say that from 2004 to 2008, Jones’ firm billed the city for countless hours he and his subcontractors never actually worked. Maybe I shouldn’t say countless, because investigators determined that the fraud involved at least $1.2 million, which Jones will be expected to repay when he pleads guilty.

(The charges came in a filing called a criminal information, used when a defendant plans to plead guilty. I couldn’t reach Jones’ lawyer for comment).

But the creepy part of this story is that the alleged fraud was never discovered by the city agencies involved – the water department, revenue department, and community behavioral health.

Subcontractors for Jones’ company complained to the city revenue department that he wasn’t paying them, and that alerted revenue officials to look more carefully at his bills and contact the inspector general. If Jones’ hadn’t stiffed his people, this might still be going on.

Maybe it’s hard for city managers to verify every hour a contractor claims he worked. But geez, if you’ve engaged an IT firm for a multi-year, multi-million dollar contract, aren’t you at least looking at their work product?

I asked Kurland whether the departments couldn’t see they were getting a million dollars less in services than they were paying for.

“I can’t answer that,” she said. “This (work) ended in 2008. They no longer have city contracts, and as part of this investigation I’ve gone back to the city departments and urged them to review all of their contracts, to see if there’s any over-billing.”

If in this one corner of the city’s $3.4 billion budget, a complaint from a subcontractor reveals a million-dollar plus drain of city tax dollars, who knows how much money is being ripped off?

I’m always skeptical of politicians running for office who promise to save money without cutting services by eliminating waste, fraud and abuse. When they get in office, they find out it’s easier said than done.

But this is exactly the kind of case that feeds cynicism about government, and convinces people that too many of their tax dollars are wasted.

Good managers are on top of their budgets and keep an eye on what their employees and contractors are up to. I’d like to see the heads of these departments look into this mess and come up with an explanation for what happened.