After audits, Delaware supervisors tighten up procurement, vehicle policies

In the aftermath of two state audits that criticized Delaware County's procurement and surplus property disposal policies, the county's board of supervisors adopted an update of those policies at its meeting on Wednesday, Aug. 26.

A procurement policy was adopted in 1992 and updated in 2008. A policy for the disposal of surplus property was adopted in 1995. Both are superseded by the new policy.

There was little discussion on the resolution to adopt a new policy at the meeting. It passed, unanimously.

The resolution states that “it is appropriate that from time to time the board revisit, update and clarify its policies and procedures so that county agencies may function efficiently while simultaneously providing safeguards to protect county taxpayers.”

It seems likely, however, that the changes are a response to an audit by the office of New York State Comptroller Thomas DiNapoli. The report of that audit, issued on March 6, criticized the county for its procurement policies.

After the meeting, Harpersfield Supervisor and board Chairman James Eisel said that the procurement and disposal policy is “one of the component parts” of a corrective action plan required by the comptroller's office.

“They did the audit and they found some things,” Eisel said. “This is one of the things we've completed. My understanding is that it will stand up with the state.”

$770,000 paid for services without contracts

Auditors stated that the old procurement policy did not require that contracts be awarded through the use of competitive procedures, that three vendors were paid approximately $770,000 for services without written contracts, that the county passed a resolution to establish a board of ethics which had never convened and that board members did not publicly disclose potential financial interests in contracts prior to 2014.

Recommendations included:

  • Amending the procurement policy to ensure that competition is used when awarding contracts
  • Ensuring that written contracts are entered into with third-party service providers, indicating the contract period, services to be provided and the basis for compensation
  • Ensuring that the code of ethics is being followed and ensuring that any potential conflicts of interest are properly documented and disclosed.

Auditors looked at the county’s general administration and oversight of third-party contractual services for the period of Jan. 1, 2013 through June 9, 2014.

Auditors said that the county awarded nine third-party contracts totaling $1.9 million without soliciting competition or documenting a justifiable reason for not soliciting competition. The report said that department heads have various procedures to monitor contract performance and payments, but that the board of supervisors did not ensure that contracts were adequately monitored.

As a result, the report said, “there is a heightened risk that services are not being provided in the most prudent and economical manner. In addition, there is little, if any, recourse in the event conflicts arise in instances where written contracts are not in place with service providers.”

Mismanaged county vehicles

A separate audit report, issued in April, found that county officials did not properly oversee the usage and disposal of county vehicles.

Auditors said that county officials were not adequately monitoring vehicle usage or performing cost-benefit analyses to support the after-hours locations of vehicles or disposal methods used.

Further, the report said that seven of the 19 vehicles that were disposed of during the audit period did not have proper board authorization, and that 17 were sold or scrapped without determining if another method could have potentially netted more revenues.

In the most egregious example, two cars – 2007 and 2008 Chevrolet Impalas -- were sold to the brother of the county's senior mechanic.

The report said that the mechanic recommended that the vehicles be disposed of for the scrap value of $350 each.

Auditors later determined through a comparison of vehicle identification numbers that the 2008 vehicle was registered to the same senior mechanic two days after the sale and that he was driving it.

“This was able to occur because the county transferred the titles of ownership without issuing NYS salvage certificates,” the report said.

That can't happen under the new rules.

New policies

The new procurement policy requires that all county purchases of over $20,000 per fiscal year and all public works contracts of over $35,000 use a formal bidding process. The policy also requires that the county get written price quotes from multiple vendors for all purchases and contracts greater than $7,000, and that it award contracts to the "lowest responsible proposal or quote."

The new property disposal policy states that vehicles will be listed on an online auction service and advertised. No county employees may participate in the auction. At the end of the auction, it will be determined whether the county will get the most money from accepting the high bid, selling for scrap or selling for parts.

If a vehicle is designated as scrap, it will be hauled by the county's department of public works to a scrap dealer and the title will be signed over to that dealer upon payment.

Other guidelines in the document cover the disposal of such items as furniture, tools and computers.

Eisel said that an ethics policy is close to completion and will “hopefully” be ready for next month's board meeting.

Read the full text of the resolution below. 

8 26 2015 New Produrement and Disposal Policies RESOLUTION

Previous coverage:

Delaware County awarded millions to vendors without competition, comptroller says, March 10, 2015