Auditor says Nebraska being overcharged for office supplies

Email|Print|Single Page| Text size – + By Anna Jo Bratton

Associated Press Writer / April 28, 2008

LINCOLN, Neb.—A national office supply company has been overcharging the state of Nebraska since winning an exclusive $3 million contract in 2005, the state auditor said Monday.

The contract with Office Depot Inc. lets state agencies buy office supplies at a negotiated discount.

But since the contract started in June 2005, State Auditor Mike Foley said, the state has been overcharged up to 400 percent on some items, although he said he can't estimate how much the errors cost.

"Once they won the contract, they just started sending invoices and thinking nobody would check," Foley said. "Who's going to keep track of a pair of scissors or a roll of toilet paper?"

Office Depot has cooperated with the state on the audit, according to a statement provided Monday by Jason Shockley, Office Depot's manager of public relations.

"We are currently reviewing Mr. Foley's report in an effort to determine the bases for his conclusions," the statement said. "We intend to provide a more comprehensive response upon completion of our review."

The company's headquarters is in Delray Beach, Fla.

The state started investigating because of reported problems in Georgia, North Carolina and California.

Georgia discontinued its state contract with Office Depot in February because of pricing errors, according to a letter from that state's Department of Administrative Services.

In North Carolina, an audit in 2007 showed the state division in charge of contracts and purchasing had done an inadequate job of monitoring its office supplies vendors, including Office Depot. The state was reimbursed for some errors after the audit.

Foley said Nebraska is seeking new bids for the contract.

One example of overcharges he gave was staples: They should have cost the state 21 cents per package, but the charge was $1.06.

Some of the errors may seem small, Foley said, but they add up.

He said the University of Nebraska has hired a private investigative firm to review a separate, $3.3 million contract with Office Depot.