Dealings of Ohio agency questioned

4/1/2005

COLUMBUS - The state agency that oversees a fiber-optic network linking Ohio's public television and radio stations split up purchases to avoid competitive bidding and altered a vendor invoice to buy computer and telecommunications equipment, the inspector general said yesterday.

The investigation concluded that Denos Christofi, executive director of the Ohio Educational Telecommunications Network, decided to buy equipment from several vendors to keep the transactions under the amount that would have triggered scrutiny from the state Department of Administrative Services. It is the department in charge of procuring goods and services.

"In our view, the number of irregularities and the circumstances surrounding many of these transactions clearly demonstrates a deliberate effort to circumvent the checks built into the state purchasing system," wrote Inspector General Tom Charles.

"This subterfuge cannot be explained away by any mere misunderstanding or attempt to save money for the state," he added.

Mr. Christofi, who was appointed executive director by the OET's 11-member commission in December, 2003, didn't return messages seeking comment. His annual salary is $100,048. He previously worked for Bank One, Unisys, and MCI Telecommunications.

Karen DelToro, an OET spokesman, said the inspector general's report contained "inaccuracies," but she would not elaborate. She said the OET's commission is drafting its response to the inspector general.

The OET operates a high-capacity fiber-optic network that connects Ohio's 12 public television stations, 34 public radio stations, and nine braille reading services. The agency has 2 employees and an annual budget of about $10 million.

Mr. Charles said the investigation revealed that in June, 2004, Synthia Shannon, an assistant OET fiscal officer, altered an invoice for switching equipment for high-speed transmission purchased from Cisco Systems through OARnet, an Ohio State University internet provider.

The original invoice referred to equipment, but a second version submitted to the state budget office stated the purchase was for "services/maintenance," Mr. Charles said.

Ms. Shannon admitted to altering the invoice, saying she felt pressure from Mr. Christofi and thought OET was getting a "service" from OARnet instead of "equipment," Mr. Charles said.

"Regardless of Shannon's rationale, altering an original vendor's invoice is wrong and violates state statutes and state accounting procedures," Mr. Charles wrote.

The Inspector General also said the purchase of computer equipment through OARnet should have been competitively bid.

Mr. Christofi told investigators that OET received a 49 percent discount on the equipment when he bought it through OARnet, instead of the 35 percent discount that state agencies received from Cisco, the equipment manufacturer.

The Inspector General's office has asked the state budget office to recover $522,197, plus interest, that OET paid OARnet. Mr. Charles believes that can be accomplished without any legal action.

In September, 2004, Mr. Christofi issued two purchase orders totalling $522,197 and miscoded the order as "telecommunications services provided to OET," Mr. Charles said.

But the purchase orders actually were OET's first payments for a $1.4 million Third Frontier Network "lambda" - a 2.5 billion bit per second channel on a network transmitting data, voice, or video communications. The Third Frontier is Gov. Bob Taft's program to help create "high-tech, high-paying jobs."

Mr. Charles said there is no written contract between OET and OARnet, which is holding the $522,197 in escrow.

A review of purchase orders found that OET officials deliberately coded them incorrectly to avoid review by the Department of Administrative Services, Mr. Charles said.

Contact James Drew at:

jdrew@theblade.com or

614-221-0496.