Colorado audit finds veteran-owned contracting program far below 3% goal, with flawed state reports
Auditors told lawmakers June 15 that Colorado’s service-disabled veteran-owned small business program has missed its 3% statutory goal every year, while the state reports tracking it were inaccurate, sometimes late and not always sent to required recipients.
Colorado’s program to steer state contracts to service-disabled veteran-owned small businesses has stayed below one-half of 1% of contract spending despite a 3% goal in state law, and state auditors told lawmakers June 15 that the agency overseeing the reports also issued inaccurate and sometimes late annual updates.
At the Legislative Audit Committee hearing, auditors said Colorado has never come close to the service-disabled veteran-owned small business, or SDVOSB, target since the goal was created in 2014. They also said the Department of Personnel and Administration’s reports for the years reviewed included contracts that should have been excluded, had calculation problems, were late in two of the three years examined and were not sent to all of the recipients required under the program.
The audit hearing put new scrutiny on the program because, auditors said, the state’s own reports on its progress could not be fully relied on.
Auditor Vicki Heller told lawmakers they may need to change statute if they want the annual report to be more than a filing requirement, because no office is clearly charged with reviewing it and requiring action when the state misses the goal. Auditors also raised broader policy options for lawmakers to consider, including clarifying DPA’s and state agencies’ responsibilities, examining whether agencies should face stronger accountability for using the preference, and reconsidering whether the current goal can be met without structural changes such as set-asides, sole-source options or subcontract counting.
The Polis administration signaled support for at least some clarifying changes. DPA Deputy Executive Director Tobin Fallenweider said at the hearing that the department supports efforts to clarify accountability and would work on “better reporting, better processes, and more effective engagements,” along with continued training, outreach and analysis.
DPA’s explanation for the reporting failures was administrative, according to the hearing discussion. Department officials said the written procedure for producing the annual report was difficult to follow and that the law and agency process left unclear who should send the report, when it should go out and how the information should be verified. Auditors also said DPA had not consistently verified report information with agencies and had not been giving agencies updates on how much they were actually contracting with SDVOSBs.