New York State Inspector General Report Identifies Oversight Gaps in COVID-Era Use of Consultant Contract at DMVs

ALBANY, NY – Earlier today, New York State Inspector General Lucy Lang released a com prehensive report evaluating the New York State Division of the Budget’s (DOB) management of various consulting projects undertaken by the Boston Consulting Group (BCG) to assist the Department of Motor Vehicles (DMV) in its post-COVID-19 reopening and technology trans formation efforts.

The investigation, which covered projects conducted from August 2020 to August 2021, at a cost in excess of $15 million, revealed deficiencies in over sight, lack of proper engagement with DMV on scope and deliverables, and procedural deficiencies in project management, including a failure to finalize Statements of Work (SOWs) prior to the commencement of work. Overall, the report high lights the need for improved contract management practices within DOB to ensure effective oversight and collaboration where a client agency utilizes a contract held by DOB.

“Best intentions cannot be a substitute for best practices,” said New York State Inspector General Lucy Lang. “This report underscores the importance of clear interagency communica tion and defined roles when pub lic funds are at stake.”

As detailed in the report, in August 2020, DOB, at the direction of the Executive Chamber, sought to assist DMV with reopening its COVID-shuttered doors by utilizing a pre-existing DOB contract with BCG. Under this arrangement, BCG was to provide strategy and guidance to DMV on a series of projects, but DMV would not hold or manage the contract. Instead, DOB itself managed the contract and projects, but did so with out adequately communicating with DMV about its needs, the scopes of work to be performed, and project expectations. More over, DOB failed to collaborate effectively with DMV to provide oversight of BCG and ensure complete and timely deliverables. DOB also permitted work to commence prior to the finalizing of a SOW for each project, leading to later confusion.

Additionally, lack of communication between DOB and DMV regarding funding sources resulted in DMV being billed for projects initially thought to be covered by other non-agency funding sources. Ultimately, following the completion of the third of five scheduled projects, DMV elected to end its relation ship with BCG

In the report, the Inspector General made three recommendations to DOB to ensure sufficient and effective contract over sight in future instances where another state agency utilizes a contract held by DOB:

• Designate a Liaison: DOB should designate a staff member to serve as the point of contact between DOB and the agency having work performed under DOB’s contract and ensure that this person is aware of and properly trained on their responsibilities, including the expectation that they will include the agency in the development of SOWs and review of deliverables.

• Strengthen Statement of Work (SOW) Policies: Require that SOWs be developed and executed at the outset of projects, prior to the commencement of any work.

• Identify Funding Respon sibility: Communicate at the outset of a project to the agency having work performed under a DOB contract if the agency may ultimately be responsible for financing the work from its own budget.

The Inspector General thanked members of her team for their work on this investigation and today’s report, including Investi gative Counsel Ray Gdula, Senior Investigator Ilene Gates, Deputy Inspector General for the New York City Region Ken Michaels, Senior Investigative Counsel & Director of Report Writing Jonathan Masters, Deputy Chief of Investigations Gary Waters, Manager of Digital Forensics Bobby Payne, and Chief Deputy Inspector General Michele Bayer. The Inspector General also expressed her appreciation to the DOB and DMV for their partner ship in investigating this matter and their shared commitment to addressing the issues detailed within today’s report.