“Given that the County has paid Deloitte more than $150 million for DHS projects since 2003, the County’s failure to elicit greater detail on its invoices  creates the potential for significant overpayments.”

(Pittsburgh) June 23, 2020   Allegheny County Controller Chelsa Wagner said her office’s audit of a software development contract for the County’s Department of Human Services (DHS) with the international IT firm Deloitte showed the County has paid the firm’s invoices without seeking sufficient detail of what specific work was performed.

The invoices submitted by Deloitte are not detailed enough for DHS to sufficiently onitor the cost and scope of Deloitte’s services, the audit shows. For example, on one invoice Deloitte billed DHS over $49,000 for 620 hours of “development support” and over $25,000 for 218.5 hours of “operations” without any further explanation to DHS of how those hours were spent.

Wagner said the onus is on the County to demand sufficient detail from vendors on their invoices

“Expenditures of taxpayer money—in particular funds earmarked for assisting our most vulnerable residents through DHS—shouldn’t be made based on unclear explanations of what services have been performed,” Wagner said. “Given that the County has paid Deloitte more than $150 million for DHS projects since 2003, the County’s failure to elicit greater detail on its invoices creates the potential for significant overpayments.”

Deloitte uses what it characterizes as an “agile” approach to developing software for DHS, an approach frequently employed in the private sector. “Agile” development, as the name implies, sees the scope and requirements evolve over the course of a project. This is juxtaposed with the more traditional “waterfall” approach, where scope and specifics are defined at the beginning of any project.

As the agile approach becomes more common in public sector projects, it’s important that it be adapted to meet standards of transparency and oversight expected of government procurement, Wagner said.

“While it appears that Deloitte is completing important projects that assist DHS staff in fulfilling their vital mission, and that its work has generally been satisfactory, what we don’t know and can’t confirm is that what we were billed truly reflects the time put into the County’s projects,” she said.

Deloitte also designed software applications that do not enable DHS staff to make needed data updates in-house and instead rely on Deloitte to make these changes, the audit shows.

“Across County departments and functions, I have long been concerned with the outsourcing of work that could and should be done by County employees to contractors that are beyond our supervision, and often outside our community. A DHS employee shouldn’t have to turn to an  outside contractor to fix a line of data,” Wagner said. “Simply put, contractors shouldn’t be performing critical, everyday functions of County government.”

“There is no doubt that our Human Services employees need the tools at their disposal to enable them to be as effective as possible. But every dollar devoted to these programs is precious, and this will be even more true as our state and County governments experience revenue challenges and more of our residents turn to support programs in the economic downturn,” Wagner said. “We cannot tolerate any amount of money being spent unnecessarily when the needs within our community are so very great.”

The audit recommends steps the County administration and DHS leadership should take to require transparency and a detailed accounting of services performed on future invoices from Deloitte and any other contractor. These include:

  • Developing a clearly defined scope of work for each new contract year.
  • Including scope of work cost estimates or other milestones in the contract amendments for each new contract year in order to provide a basis for accountability and measurement of contractual performance.
  • Assessing which data elements would be necessary for DHS to effectively monitor contractual performance and require that Deloitte provide its invoices for payment in a format that contains those data elements.
  • Using the modified invoices to assess whether adequate value is being received in connection with contract expenditures.
  • Closely monitoring the submission and resolution of service requests from DHS staff to provide insight into Deloitte Consulting’s contractual performance.

“Our taxpayers deserve to know that every dollar is going to the purposes intended. Implementing the recommendations of this audit can both strengthen DHS operations and put it in a better position to ensure that the County obtains the full value of the tax dollars being paid to contractors,” Wagner said.

View the full Performance Audit Report on Contract Compliance with Contract #209006 between Deloitte Consulting and Allegheny County for the Period January 1, 2018 through December 31, 2018.