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McCaskill finds state exaggerating how much business given to women and minorities

November 4, 2003
By: Megan Clarke
State Capital Bureau

In her most recent audit, State Auditor Claire McCaskill reports state agencies are not contracting enough minority- and women-owned businesses for state services and capitol improvements.

McCaskill, who's running for the gubernatorial election, also scrutizes her opponent Gov. Holden's Office of Administration saying it's over reporting program participation.

Megan Clarke explains the latest audit.

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In 1998, an executive order was issued to state agencies to contract 10-percent of government services to minority businesses and 5-percent to women-owned businesses.

State Auditor Claire McCaskill found that in 2002, state agencies fell short of the state's participation goals with 9-percent of contracts going toward minority businesses and 3-percent to women-owned businesses.

McCaskill says that participation results were higher when agencies made expenditures through the Office of Administration and exceeded in almost all areas except for purchasing good and services from women-owned businesses.

Ann Hamlin from the Office of Administration welcomed the audit.

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WE SAW NO SURPRISES. THE INFORMATION THE AUDITOR GOT TO US WE KNEW ALREADY. WE ARE PLEASED AND SATISFIED THAT THE AUDITOR CHOSE TO RECOGNIZE OUR SUCCESS.

While the Office of Administration did exceed the state's goals, the audit also found inaccuracies in the offices' reporting.

McCaskill found that the OA overstated minority- and women-owned business project accomplishments by about $2 million. Auditors also found that OA double-counted minority women-owned subcontractors as both minority businesses and women businesses.

Hamlin says the double-counting does not discount the offices' success in meeting state goals.

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OCCASIONALLY DOUBLE COUNTING OCCURS AND THAT IS A PROCESS WE CAN ADDRESS AND IS BEING ADDRESSED. DOUBLE COUNTING DOES NOT SIGNIFICANTLY IMPACT OUR SUCCESS AND HIGH RESULTS.

Hamlin says that already OA is working to correct the double-counting mistakes.

She expects state agencies to improve in minority- and women-owned business participation in the next year, but says that the current state of the economy may jeopardize progress.

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NO ONE HAS A CRYSTAL BALL CONSIDERING THE ECONOMIC CLIMATE AS IT IS, BUT THE FACT THAT WE ARE TWO YEARS INTO THIS ECONOMIC DIFFICULTY NATIONWIDE AND WE ARE STILL INCHING FORWARD AND MAKING PROGRESS GIVES US HOPE THAT WE WILL CONTINUE TO SHOW IMPROVEMENT.

State officials have not formally assessed the minority- and women-owned business program to determine its effectiveness. McCaskill's audit is the first assessment since the program started in 1998.