AgdaPkt 2014-01-13 Interview, Closed and Regular

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Cit 7.1.G. _Page 181`ity Single Audit Reports Schedule of Findings and Questioned Costs, Continued For the Year Ended June 30, 2013 D. PRIOR YEAR FINDINGS AND QUESTIONED COSTS, Continued SA 2012 -02 - Procurement, Suspension, and Debarment: Criteria: As described in 2 CFR §215.47 of OMB Circular A -87, the City is responsible of maintaining a contract with the vendor to ensure all terms, conditions, and specifications of the contract are met. Condition: The City purchased water meters for the WaterSMART program with a vendor. There is no agreement, purchase order, or proper approval between the City and the vendor. The City purchased water meters totaling $203,599 in fiscal year 2012 from Golden State Flow Measurement. This is in violation of the City's Purchasing Policy which requires purchases greater than $100,000 to be approved by City Council. Cause: The City experienced turnover in personnel who oversaw the program. The new staff was unaware of these requirements. Questioned Costs: Not applicable. Context and Effect: The City purchased water meters without obtaining proper approval and disclosing proper terms and conditions as required by OMB Circular A -87. Recommendation: We recommend that the City provide trainings to City staff on the City's policies and procedures. We also recommend that City staff review City Council meeting minutes to verify purchases are properly approved. Management Response: In fiscal year 2012, the Public Works Division purchased water meters totaling $203,599 from Golden State Flow Measurement without a formal agreement. The reason for not creating a formal agreement between the City and Golden State Flow Measurement is unknown as staff who managed the program are no longer employed by the City. To correct this problem going forward, the Public Works Division plans to conduct a competitive bidding process to review proposals from various vendors and enter a formal agreement with a water meter provider. To make certain that information is shared and individual staff are not the only one managing a project, the Public Works Division has created a new administrative group that will review all contracts, bid specifications, competitive proposals, grant applications, and other documents for completeness before they go to the Assistant Public Works Director for approval. This new layer of management will ensure that the documents produced by each operating section (Water, Wastewater, Right -of -Way and Fleet) are correct, follow all City guidelines, and that project information and responsibility is shared. 13