Maryland state audit says South Korean test kits were procured inappropriately

A Maryland state audit has concluded that Governor Larry Hogan’s administration failed to follow appropriate procedures when it obtained 500,000 COVID-19 tests from South Korea in the early days of the pandemic.

The LabGenomics kits arrived as states throughout the country scrambled to secure testing devices as the coronavirus spread.

READ MORE: Maryland acquires 500,000 COVID-19 tests from South Korea after weeks of discussions

At the time, the Governor celebrated the acquisition, dubbing it "Operation Enduring Freedom," and describing it as a testament to the state’s special relationship with South Korea. The First Lady of Maryland, Yumi Hogan, is a native of South Korea.

Months later, however, a Washington Post report indicated that the first batch of tests were "flawed" and many had to be replaced.

READ MORE: Maryland Gov Hogan says Washington Post report about ‘flawed’ South Korea tests was ‘false’

About $12 million was ultimately paid for the tests and for a chartered flight to ship them, but those funds were not supported by formal written contracts or agreements containing any of the critical provisions required by state regulations, the audit said.

"The lack of a comprehensive written contract precluded effective monitoring," Gregory Hook, the legislative auditor, wrote. "We also were not provided with comprehensive written documentation of the extent to which other vendors were considered, or of the specific parties involved in the evaluation and selection of LabGenomics."

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The audit said a review of available records indicated the state did not ensure that the tests received on April 18 and April 22 last year were authorized by the FDA prior to them being shipped by LabGenomics.

The administration noted that, at the time they had been purchased, an emergency use authorization was pending.

"The unprecedented nature of the emergency required adapting existing practices to assure that Maryland was able to meet the needs of this emergency and was not restrained by practices that had never been tested in such an extraordinary way," wrote Eric Lomboy, the chief of staff for Maryland Department of General Services and Thomas Andrews, the chief of staff for the health department.
Lomboy and Andrews added that they thought the review by auditors was conducted in a way that gave the appearance the Maryland General Assembly’s Office of Legislative Audits produced a "rushed and politically-driven report implying dubious conclusions reached without regard to the actual circumstances surround the subjects of the Review."

But lawmakers who have been critical of the deal and a lack of transparency said the audit confirmed they had reason to be concerned.

"Because the State rushed the process and failed to have a written contract, taxpayers were not only left on the hook for another $2.5 million just to exchange the initial batch of tests for a new set of tests that could be used, but it led to months of delay that might have actually cost lives," Sen. Clarence Lam, who is a physician, said in a statement.

The state senator also noted that a review raised questions about the reliability of the first batch of tests.