AUDIT: City of Austin paid $95K for space it didn’t use

Investigations

AUSTIN (KXAN) — A report released by the Office of the City Auditor found that Austin wasted almost $100,000, paying rent for building space it wasn’t using.

The building in question is the city’s data rack center, which houses servers that contain important data and information.

KXAN has requested the location of the data rack center for months, which Austin is not disclosing because of its sensitive nature.

Sensitive law enforcement files shared to the city by the Austin Police Department are often kept there, and they require extra security measures.

“You can encrypt data in more advanced ways than normal city data, and these [guidelines] are all set from the Department of Justice,” said Brian Molloy, Chief Investigations in the City Auditor’s Office.

The city’s Communications and Technology Management Department oversees the data, and rents out the data rack center.

But auditors say the department did not ensure the data rack center could appropriately house the sensitive law enforcement data, upon signing the lease in 2017 or even when CTM was supposed to move into the building.

The audit report, released Thursday, says the CTM staff “ignored concerns that criminal justice data might be moved to a space not suitable to host it.”

It reads: “Staff members began raising these concerns prior to the contract being signed with the vendor in December 2017.”

“There were people who realized that the city has issues they need to be concerned about, and were moving them up the chain at the department,” said Molloy.

The city leased the space anyway, for nearly a million-and-a-half dollars over five years.

Auditors say CTM staff actually knew about the security concerns a full year before the lease was signed.

The space wasn’t ready for move-in until June of last year, eight months after the lease began.

During that time, the city paid roughly $95,000.

“In those eight months we were paying for a facility we couldn’t fully use,” said Molloy.

The data rack center is now being fully utilized, after the city added the extra security measures.

CTM management responded to the audit by saying it had saved money by leasing the colo (or data rank center), despite the delayed move and the site not being ready by move-in.

“The data center move strategy is a complex story, and a number of important facts and figures need to be added to assure a complete understanding.

Reports that CTM (Communications and Technology Management Department) has wasted City funds at the colo are mistaken. Although the CIO (Chief Information Officer) took problematic advice from staff in delaying the data center move, CTM has in fact saved money by using the colo, in spite of delaying the full move into the colo.

By timely contracting the colo, CTM gained savings of $600,000 over five years on the colo cost itself. Additionally, CTM gained a savings of $500,000 over five years for Internet connectivity.”

Management, Austin Communications and Technology Management Department

A city spokesperson tells KXAN it’s still in the process of reviewing lease procedures after last year’s audit of all its leases.

At this time, the spokesperson said no CTM employees have been disciplined.

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