State Auditor David Vaudt has released a second report on business conducted by several state agencies with a consulting company based in Chicago. Last year, in the first wave of Vaudt’s audit, he found the state paid A.T. Kearney 3.7 million dollars to recommend efficiencies that saved the state 2.7 million. "What we found in wave two is the state paid approximately 882-thousand dollars, but the first year savings we were able to validate was only about 50-thousand dollars," Vaudt said.
A.T. Kearney officials dispute the findings. The company issued a press release saying the state would recognize more savings if more of the consultants’ recommendations were implemented. Vaudt says he stands by his report. "The actual contract projected that A.T. Kearney would provide about 1.6 million dollars worth of savings. The 50-thousand dollars is only about 3.2 percent of that targeted savings amount," Vaudt said.
Last year, Governor Culver suspended payments to the company and the state has also denied a bonus to A.T. Kearney for it’s work. Vaudt says, in the future, state agencies should be more careful in their dealings with contractors. "Number one, you have to make sure that the calculated savings amounts that are being used are good estimates by the contractor. The contractor should have something in the game also to make sure that if savings don’t amount to the estimated amounts – their fixed payments also get adjusted," Vaudt suggested.
A.T. Kearney was originally hired by the state under a contract through the Iowa Department of Administrative Services. DAS Director Mollie Anderson has maintained that over time, the state will realize more savings from the company’s recommendations. After the first audit report, Governor Culver shifted oversight of the contract from DAS to the Iowa Department of Management.