Audit Critical of State Shredding Contract
Lincoln, NE - For the second time in a year, the Nebraska state auditor is going after the Department of Administrative Services, the state office that handles millions of dollars in state contracts.
Auditor Mike Foley says the DAS failed to collect more than $60,000 that a paper-recycling company owed the state.
Foley said Thursday that Shredding Solutions, Inc. should have paid a market-rate value for the paper, which it gathered from state offices, shredded, and sold for other uses.
He says the agency received a flat rate of $25 per ton, even though the company was at times obligated to pay $55 to $100 per ton of paper. "How long would this have gone on if it had not been detected by the audit team?" asked Foley.
Foley says his inquiries prompted an internal agency audit. Shredding Solutions repaid $27,000, but Foley says it still owes the state $33,000.
A man who answered the phone at Shredding Solutions, Inc., says the company will repay any money it owes to the state.
"I find the State's relationship with this contractor to be highly peculiar," said Foley.
In August, Foley criticized the DAS for inadequate record-keeping and failure to follow the state's bidding requirements. The DAS disputed that report.
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