Feeble oversight of Essex County’s $40M vaccine program spurred abuses, watchdog finds

It hasn’t been even a week since Gov. Phil Murphy was singing Essex County’s praises.

“There may be no county in America that’s better run than Essex County,” he said during WNYC’s Ask Governor Murphy program Wednesday night. “There are a handful of the best-run counties in America that are in New Jersey, and Essex happens to be one of them.”

But in a new report released Tuesday, a state watchdog says Essex County, which is run by six-term Democrat and Murphy ally Joe DiVincenzo, colossally fumbled oversight of its $40 million COVID-19 vaccination program. County officials flouted federal, state, and local procurement rules and exercised so little control over spending that one politically connected vendor pocketed an identical six-figure payment twice while at least eight workers regularly got paid despite logging full-time hours with other government agencies, the report says.

Acting State Comptroller Kevin D. Walsh found that Essex County officials improperly awarded millions of dollars as emergency contracts — continuing to do so long after vaccines were widely available — and bypassed the competitive bidding process, public review, and approvals required to guard against overspending and abuse.

“The government’s obligation to protect taxpayer funds doesn’t go away during an emergency,” Walsh said in a statement. “As we found in Essex County, overusing emergency contracts and failing to monitor vendors and implement basic financial controls increases the likelihood of fraud, waste, and abuse — risks that can and should be avoided.”

Investigators in the comptroller office’s COVID-19 compliance and oversight project launched the probe after an anonymous tipster reported concerns about the program, which administered more than 622,000 vaccines from December 2020 through August 2023 at five sites in Newark, West Caldwell, Livingston, and West Orange, plus from a mobile clinic that traveled around the county.

The investigators found that officials continued to flout the rules around spending federal vaccination funds even though they followed appropriate procedures for other emergencies during the pandemic, such as responses to Tropical Storm Isaias and Hurricane Ida and the handling of indigent burials due to COVID-19, according to the report.

Investigators determined officials failed to document the need for emergency contracts or execute vendor contracts that spelled out the terms required by federal grants, as required. These failures expose the county to the possibility that the federal government could act to recoup the funds, Walsh’s report notes.

In a statement, DiVincenzo called the comptroller’s report an unbalanced, unfair, and inaccurate “gotcha” document that identifies issues with a small fraction of the funds Essex County spent fighting COVID-19. DiVincenzo also chided Walsh’s office for not helping local officials prevent the misuse of public funds in the early months of the pandemic.

“It would have been helpful to have them stand shoulder to shoulder with us back then rather than have them unfairly criticize our performance years later,” the statement says.

Vendor problems

The investigators also discovered lax oversight of the 93 outside vendors the county hired to carry out its vaccination program, including 15 payments totaling $871,211 that were made without invoices, making it impossible to validate what goods or services were provided.

In one case, officials paid a vendor $264,000 for advertising services but couldn’t confirm those services were performed.

In another case, the county paid Dunton Consulting almost $1.3 million for robocall services from May 2020 through August 2021 without verifying the calls occurred, and even though the firm’s invoices were riddled with errors and charged fees that “varied wildly, without explanation.” The company also charged far more — 2.8 to 9.8 cents a minute — than county officials paid when they eventually put the contract out for competitive, public bidding, the report notes. The county paid less than 1 cent per minute under the newer contract.

County officials also erroneously paid Dunton $110,514.41 twice for the same services, but the East Orange-based firm’s owner Rasheida Smith and county officials said they didn’t notice the error until the Comptroller’s office brought it to their attention, according to the report. Instead of ordering the immediate return of the full overpayment, officials agreed Smith could repay a discounted amount, which they characterized as a “loan,” over five years without interest, the report notes.

That’s a “flawed” response because the state constitution prohibits governments from loaning public funds to private companies, the loan wasn’t signed by any county officials, county commissioners didn’t approve it at a public meeting, and the county hasn’t shown it “has the proper internal controls to monitor a long-term loan,” investigators wrote.

Smith is a Democratic political operative and former campaign manager who has worked for U.S. Sen. Cory Booker, former Rep. Charles Rangel, and other prominent politicians. She co-founded Dunton with Leroy Jones Jr., a former state assemblyman who now chairs the Essex County and statewide Democratic parties. Jones is no longer affiliated with Dunton, NorthJersey.com reported in 2022.

“The County’s contract with Dunton demonstrates that excessive emergency contracting without competitive bidding can result in a shocking price tag for taxpayers,” investigators wrote in the report.

Smith could not be reached to comment.

Lax oversight of staffing

More than 850 people worked in the vaccination program, and county officials allowed them to log their hours remotely and didn’t enforce on-site sign-in sheets meant to confirm their presence, investigators found.

As a result, the county spent $17 million on staffing without verifying that workers worked the hours they logged, investigators said.

Eight workers routinely worked other public jobs at the same time they worked for the county’s vaccination program, meaning they got paid by both public entities for the same hours — including one woman who collected $130,000 over 11 months under the vaccine program, even though the county health officer didn’t know who she was or what she did, according to the report.

Even after firing three workers who were found to have fudged their hours, officials didn’t tighten its timekeeping system or bother to investigate more broadly, according to the report. Officials also classified the vaccination workers as independent contractors, meaning the county then didn’t pay into unemployment funds or provide benefits.

Investigators shared their findings with the state Department of Labor and Workforce Development and other authorities for follow-up action.

DiVincenzo’s statement says Essex County immediately fired “no show” employees and “when possible,” funds were repaid.

“I’m not saying that we were perfect. But when any wrongdoing was identified, we acted swiftly,” it says.

Natalie Hamilton, a Murphy spokeswoman, said the governor is aware of the comptroller’s findings “but also recognizes that the speed of establishing a fully operational vaccine program in late 2020 and early 2021 was directly correlated with saving lives.”

“Under the leadership of County Executive Joe DiVincenzo, Essex County had one of the most efficient vaccine programs anywhere in America, helping establish New Jersey as a national leader in vaccine distribution,” Hamilton said.

Walsh and his investigators issued three recommendations, urging Essex County officials to:

• Hire an independent auditor to assess vaccination program spending to ensure all payments were appropriate.
• Use “all available legal mechanisms, including litigation if necessary,” to recover any overpayments, including the duplicative Dunton payment. Officials also should assess the federal grant implications of such improper payments and consult federal Treasury officials to report overpayments and ensure compliance with grant requirements.
• Conduct an internal review of the vaccination program and prepare a corrective action plan within 60 days to identify how county practices should improve for future emergencies, especially relating to the emergency procurement process, contract oversight, and staffing policies.