Hyattsville spent without council approval

The city of Hyattsville spent money without city council approval and exceeded authorized contract maximums in fiscal year 2022, according to a review of accounts payable data obtained via Public Information Act request. This includes almost $400,000 from recurring monthly Dataprise invoices and almost $60,000 to a Baltimore-based real estate development company called Monarch Butterfly Enterprises, as well as vendors with council-approved contracts where expenditures exceeded authorized limits.

According to Hyattsville’s procurement policy at the time, the city council was supposed to approve any vendor contracts, such as for construction or professional services, in excess of $10,000. Hyattsville city council regularly approved such contracts throughout FY 2022, but in multiple instances, financial records show that the city either exceeded council authorized maximums or spent more than $10,000 without council approval.

Such is the case with Dataprise, which has provided the city with IT support services since 2014, according to council records, including a $15,000 monthly contract beginning in 2018. In December 2019, the city council authorized a six month extension to the Dataprise contract at no more than $24,500 per month. At the time, city staff said they planned to rebid the Dataprise contract in February 2020. Six months came and went, and council meeting agendas show no subsequent contract approvals, either to extend the Dataprise contract past the six month expiration or to approve a new IT contractor. Instead, council approval seems to have lapsed until June 2022, when they approved a two-year renewal at no more than $51,587 per month, more than triple the original contract maximum.

During this lapse, in FY 2022, the city continued to record monthly Dataprise invoices ranging from $29,000 to $42,560 out of the general fund, in addition to other invoices for smaller amounts. Budget documents state that the city spent over $400,000 on IT contracted services in FY 2022. Council also approved various hardware and cabling contracts with Dataprise, many of which specified the funding would come from American Rescue Plan Act (ARPA) dollars.

While the Dataprise monthly invoices were the largest unauthorized contract expenditure identified by Route One Finance, a review of financial records revealed other apparently unauthorized spending, as in the case of Monarch Butterfly Enterprises. According to state records, Monarch Butterfly Enterprises was incorporated for the purpose of real estate development and marketing, and the company’s Facebook page highlights real estate-related content. However, according to a Bladensburg town council agenda, Monarch Butterfly Enterprises provided grant writing services to the city of Hyattsville, including to the police department. Accounts payable records show $59,800 in expenditures, but a search of council records reveals no contract authorized by the city council for Monarch Butterfly Enterprises.

Northstar Tutoring, another vendor, coordinates free, volunteer-provided tutoring for Hyattsville children. The council authorized $70,000 for this contract in FY 2022, but the city actually spent $81,144, according to financial records. The draft contract in the council documents calls for monthly payments of $5,833, but the city actually paid out $6,666 monthly, plus another $1,152 in a one-time February 2022 payment.

To produce this story, Route One Finance looked at seven vendors with the highest general fund expenditures, excluding vendors like Pepco or the city’s bank. Only one of these vendors — HR&A Advisors — appeared to have a council-authorized resolution for the total amount spent. The other analyzed vendors were Adirondack Tree Experts, Professional Lawn Maintenance Services, and Big Belly, which provides smart trash and recycling cans to the city. Each of these vendors had higher recorded expenditures than their council-authorized contracts in FY 2022.

Despite promising a performance audit of city procurement in September 2022 after allegations that former Hyattsville mayor Kevin Ward embezzled federal funds from his employer by submitting fictitious invoices for payment, city staff never formally solicited auditors for such services. City communications manager Cindy Zork said in April 2024 that the city had no current plans to complete that audit.

Procurement performance audits typically assess whether contracts adhere to approved spending amounts and follow local procurement policies, as in an external audit of Montgomery County Public Schools. The city’s annual financial statement audit is not responsible for assessing whether the city is complying with its own procurement policy.

The city recently raised the council approval threshold to $50,000. Submitting contracts for council approval, in addition to being required by city law, also allows the council members to decide whether they think the payment amounts are reasonable and allows the public to voice opinions on potential spending.

Route One Finance submitted a detailed list of questions to the city last Monday, including asking who at the city decided not to pursue the planned procurement audit promised in September 2022, who was responsible for submitting and approving the recurring Dataprise invoices for payment, and what services Monarch Butterfly Enterprises LLC provided to the city. As of publication, the city had not answered any questions or provided comment.