Overview
MCCA entered into a no-bid contract, which was 1 of the 35 purchases over $50,000 in our sample, without following MCCA’s procurement policies. This contract was for a media consultant; $102,000 was expended in association with this purchase. During the audit period, in total, MCCA spent $505,000 under the contract and spent an additional $103,371 after the audit period. MCCA was unable to demonstrate that this purchase followed its procurement policies.
Circumventing the procurement process may result in, and itself may constitute, inappropriate or illegal behavior on the part of public officials. If MCCA does not put contracts out to bid, then there is an increased risk that MCCA may not award contracts to the most appropriate vendor offering the lowest price; this risks wasting public resources. Additionally, circumventing the procurement process may lead to unfair or inappropriate behavior in the procurement process. We have referred this matter to appropriate officials for further review.
Authoritative Guidance
The MCCA “Procurement, Purchasing and Payment Policy and Guidelines” states:
PURCHASES OF $50,000 OR MORE
Competition is required during vendor selection. A formal, advertised public bid process must be followed which, depending on the type of goods or services needed, may take the form of an Invitation for Bid (IFB) or a Request for Proposal (RFP).
Reason for Issue
MCCA’s director of purchasing told us that the previous executive director chose the media consultant and that the procurement department was not involved in the process.
Recommendations
- MCCA should always follow its purchasing process by advertising and documenting procurements of $50,000 or more.
- MCCA should follow its existing policy and ensure that its procurement department is involved during the process for every procurement of $50,000 or more.
- MCCA should review all of its existing procurements to ensure they comply with its policy.
- MCCA should modify its “Procurement, Purchasing and Payment Policy and Guidelines” to require compliance in full with Chapter 30B of the General Laws.
- MCCA’s board of directors should exercise appropriate oversight of MCCA management to ensure the agency’s compliance with procurement, ethics, and all other applicable laws and review all of its existing procurements to ensure they comply with its policy.
Auditee’s Response
The MCCA agrees with the [Office of the State Auditor’s] finding. The MCCA did not follow its internal procurement policy when procuring a media contract in May of 2020. This media contract, which was terminated during [fiscal year] 2023, was pursued as a sole source procurement by the MCCA’s prior executive director without the involvement of the procurement department. While Sole Source procurements are allowed under the MCCA procurement policy, there was no sufficient business justification provided for a Sole Source procurement in this case. In 2023, the Healey‑Driscoll Administration appointed 7 new members to the MCCA’s board, including a new chairperson.
The MCCA’s current board of directors exercises appropriate oversight of MCCA management to ensure the agency’s compliance with procurement, ethics, and all other applicable laws.
Auditor’s Reply
Given its response and the new business system referenced in MCCA’s response to Finding 2 of this report, we believe that MCCA is taking steps to resolve this issue. We believe that MCCA needs to strengthen its existing procurement process by ensuring that it has effective internal controls in place that are designed to prevent similar events from occurring in the future. We reiterate our recommendation that MCCA should conduct a review of all its existing procurements to ensure that it complies with its policies and the law.
| Date published: | August 19, 2024 |
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