CommunityLocal BusinessStacy M. Brown

D.C. Auditor’s Report Reveals Lack of Equal Opportunities for Many CBEs

Council Member McDuffie Demands Better Transparency and Accountability

The most recent DC Auditor’s report reveals “yet another example of agency finger-pointing when what residents and small businesses need is accountability and transparency.”

This pointed evaluation from Ward 5 Council member Kenyan McDuffie included pushback against findings that claimed neither the Department of Small and Local Business Development (DSLBD) nor the Office of Lottery and Gaming (OLG) have meaningfully enforced the 35 percent participation goal for the city’s lottery as required by law.

The report arrived at the D.C. Council with a headline, “Weakness Cited in Monitoring Lottery Contract Certified Business Enterprises (CBEs).”

“When executive agencies neglect CBE requirements, District residents, workers and small businesses bear the costs,” McDuffie said. “I will continue to advance legislative solutions and provide vigorous agency oversight that ensures CBE requirements are fully and faithfully followed.”

The Auditor’s report revealed that DSLBD failed to provide evidence that it complied with D.C. law in certifying six of the CBEs listed on the OLG Contract Subcontracting Plan.

According to McDuffie’s office, the report indicated that DSLBD did not have an appropriate or effective process to validate three CBE certification requirements in the D.C. Code, including how they evaluate managerial functions performed in the principal office.

Information provided by McDuffie said those findings took into account whether one or more veterans controlled the management and daily operations.

McDuffie, who serves as chair of the Committee on Business and Economic Development, raised “numerous concerns about agency compliance with CBE laws.”

His office asserted that McDuffie has held oversight hearings and authored bills to strengthen CBE laws, including a recent emergency measure that clarified the meaning of independently owned, operated and controlled for DSLBD – one of the recommendations found in the Auditor’s report.

Established in 2005, the DSLBD counts as the agency responsible for administering D.C.’s CBE program. Its tasks include certifying businesses that meet the criteria outlined in D.C. Code, overseeing the recertification process every three years and overseeing the compliance of District agencies and beneficiaries of all government-assisted contracts.

The audit included a review of the specific functions of two divisions within DSLBD – the Certification Division and the Compliance and Enforcement Division.

“Each agency contends it is the responsibility of the other to ensure CBEs are actively participating on the contract and performing meaningful work,” the auditors wrote.

“A review of D.C. law revealed a lack of relevant guidance regarding CBE oversight. For the OLG contract, we found that DSLBD allowed Intralot to violate the law by using a subcontractor, DC09, to pay CBEs. DSLBD awarded credit toward the 35 percent CBE participation goal for work not performed by two CBEs.”

The auditors concluded:

“The CBE compliance rate is less than 1 percent one year into a five-year contract. We also found that OLG did not require Intralot to provide supporting documentation for CBEs and that invoices are not being reviewed by the Contracting Officer Technical Representative (COTR).”

Stacy M. Brown

I’ve worked for the Daily News of Los Angeles, the L.A. Times, Gannet and the Times-Tribune and have contributed to the Pocono Record, the New York Post and the New York Times. Television news opportunities have included: NBC, MSNBC, Scarborough Country, the Abrams Report, Today, Good Morning America, NBC Nightly News, Imus in the Morning and Anderson Cooper 360. Radio programs like the Wendy Williams Experience, Tom Joyner Morning Show and the Howard Stern Show have also provided me the chance to share my views.

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