News Story

Was This State COVID Spending Item ‘Appropriate?’ Auditor General Can’t Say

State auditors were unable to determine whether $1.8 million spent by the state for consulting services related to COVID-19 expenditures with a national firm was appropriate.

The audit states that McKinsey & Company was paid $3.2 million for consulting services, but auditors were unable to determine whether $1.8 million of the spending was appropriate.

The audit simply states, “further documentation required” and “unable to assess appropriateness.”

McKinsey was involved in many discussions with upper-level state administrators, according to emails released in response to a Freedom of Information Act request from Judicial Watch.

McKinsey’s role included providing data and helping with presentations and website design related to state COVID pandemic responses.

Robert Gordon, then-director of the Department of Health and Human Services, stated in an April 5, 2020, email that the state was already working with a company without having a signed contract.

“(McKinsey employee Razili Lewis) Raz has objected to telling press that McKinsey is working with us because they do not yet have a signed contract and do not have permission as a matter of their internal governance,” Gordon said in the email. “I have not been in the conversations with McKinsey about arrangements—can you advise on how to handle given her position? I’m sure that if we leave McKinsey out of today’s response due to a legal matter, we all will want to include them soon.”

The 2020 law authorizing the spending directed the Office of the General to produce monthly assessments of “the appropriateness of the preceding month’s expenditures,” but did not define “appropriateness.”

The Michigan Department of Health and Human Services said it was looking into the matter. McKinsey & Company did not respond immediately to an email seeking comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.