Audit of the Supplier Diversity Office (December 23, 2024)

This is a state performance audit of the Massachusetts Supplier Diversity Office, covering January 1, 2021 through December 31, 2022.

“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Supplier Diversity Office (SDO) for the period January 1, 2021 through December 31, 2022.”

Auditors reviewed whether the office was expanding fair access to state contracts, monitoring agency spending goals, checking contractor compliance, and providing training and services.

“In this performance audit, we determined the following:”

The office is supposed to help make sure state contracting includes diverse and small Massachusetts businesses, so weak monitoring can mean those opportunities are missed.

“Although SDO has made progress reaching out to SDP-participating state agencies to help them meet spending benchmarks since it was first established as an independent state agency in January 2021, if SDO does not monitor SDP-participating state agencies to ensure that they meet SDP spending benchmarks, then it cannot ensure that state procurement and contracting incorporates diversity and equity practices or the inclusion of diverse and small Massachusetts businesses.”

For residents, this matters because state purchasing is public business, and better oversight can help more local diverse and small businesses compete for taxpayer-funded contracts.

“One of SDO’s goals is to increase opportunities for certified diverse and small businesses in state contracting.”

Auditors found two main problems: incomplete evidence that SDO monitored agency spending benchmarks, and unresolved cases where contractors overstated indirect supplier diversity spending.

“The Supplier Diversity Office did not settle overstated Supplier Diversity Program indirect spending discrepancies reported by statewide contractors.”

The auditor plans to check back in about six months on the contractor spending issue and related access and monitoring concerns.

“SDO agrees with our recommendation, and we will follow up on this issue in approximately six months as part of our post-audit review.”

The audit says SDO met some goals, including broader access and training, but fell short on monitoring agencies and statewide contractors closely enough.

“To an insufficient extent; see Finding 2 and Other Matter 2”

The Supplier Diversity Program is the state effort to track and increase spending with certified diverse and small businesses; spending benchmarks are target percentages agencies are expected to meet.

“The annual SDP spending benchmarks are expressed as a percentage of the discretionary budget for each SDP-participating state agency.”