Park Board finds huge cost overrun on outsourced background checks

The bill for running background checks on new Park Board employees and volunteers came in $53,000 over budget in the first year it was contracted out to a third-party vendor, nearly 60 percent higher than anticipated.

Last May the Park Board voted to outsource background checking duties from the Park Police Department to Verified Credentials, agreeing to pay the Lakeville-based firm no more than $90,000 in a one-year contract. Park Board staff said the move would save money, streamline the process for an organization that has had trouble filling positions in a timely manner and free up its police officers to spend more time on patrol.

At the June 18 Park Board meeting commissioners were told Verified Credentials was owed $143,095 for the year. Staff explained that a number of internal errors contributed to the cost overrun.

“Specifically, the proposal did not include an estimated number of applicants background checks; it also did not include the cost of conducting a national check for sex offender violations; nor did staff realize that the cost of the driver’s license check was higher than the amount in the proposal,” wrote Park Board Superintendent Jayne Miller in an email to commissioners.

Also, Park Board staff told Verified Credentials to base its bid on 1,000 applicants for the year, even though it averaged 4,400 applicants per year over the previous three years.

An inquiry by District 6 Commissioner Brad Bourn found that Verified Credentials was paid $18,080 to check the National Sex Offender Public Registry, a service that is provided for free online.

“The HR Department was not aware of this free service, and unfortunately does not have the resources to take advantage of it, either; staff is barely able to keep up with the data entry of the applicant information and approval process. Staff is working weekends and nights to keep up with the hiring season demands,” wrote Miller in the same email.

Bourn pointed out he emailed staff in February when he looked at the Park Board’s year-end financial report and saw that $75,344.91 – more than 80 percent of the yearly budget – had already been spent on background checks in just six months.

He said in a phone interview that if staff had followed up on his concerns in a timely manner, the commissioners could’ve addressed the issue before the contract was up. Instead, commissioners were forced to extend the contract to the end of 2014 to avoid a seasonal hiring backlog, voting yesterday to pay Verified Credentials up to $215,000 for the 18-month period dating back to June 1, 2013.

Park Board Human Resources Director Pam French apologized for the errors, but did note that background checks now take an average of two days, a significant improvement from the Park Police’s two-week average.

She also said that the Park Board lost two staff members involved with the background check contract during the winter, contributing to the delay in addressing the issue.

Ben Johnson // 612-436-5088 // bjohnson@journalmpls.com // @johnsonbend