Overview
During the audit period, the Essex Sheriff’s Department (SDE) did not maintain contract procurement documentation as required, document exemptions from those requirements on a Competitive Procurement Exception Explanation Form, or consistently complete a Standard Contract Form signed by the Sheriff and the vendor. As a result, the Commonwealth cannot be certain that these procurements were conducted openly and fairly or that SDE obtained these goods and services at the best possible value.
SDE has a Procurement Department that is responsible for procuring all goods and services for SDE and maintaining procurement-file documentation. We sampled 19 vendor procurement files with expenditures exceeding $10,000 each for the period July 1, 2015 through June 30, 2016 and/or the period July 1, 2016 through December 31, 2016. We tested the files for compliance with SDE’s procurement policy regarding required procurement-file documentation, including evidence of competitive procurements. Our review noted that 10 files were for procurements from vendors on state contracts. An 11th procurement file reviewed was for legal services. Legal services are exempt from being competitively procured, but SDE did not document the exemption using a Competitive Procurement Exception Explanation Form. We noted the following issues with the other 8 files reviewed: 2 files lacked details of negotiated terms and conditions; 4 files lacked evidence of being competitively procured, including Invitation for Response forms; and 5 files lacked the Commonwealth Terms and Conditions form and a Standard Contract Form signed by both the Sheriff and the vendor.
Authoritative Guidance
Section .06 of SDE’s Policy Governing the Procurement of Commodities and/or Services lists SDE’s contract documentation requirements for all purchases:
All acquisitions of Commodities and/or Services must be competitively procured unless the acquisition qualifies as one of the exceptions listed under section .05, Competitive Procurement Exceptions, of this policy. . . .
- Procurement File: A Sheriff’s Office shall maintain a paper or electronic Procurement file for each Procurement of Commodities and/or Services. The file shall contain the original, copies or the file location of the [Invitation for Response] and data or other information relevant to the Procurement and selection of a Contractor, the executed Contract form(s), correspondence with the Contractor and any applicable approvals or justifications.
Section .07(2) of the policy states,
b. Commonwealth Terms and Conditions: An authorized signatory of a Bidder must execute a Commonwealth Terms and Conditions, which is executed only once and must be filed as prescribed by [the Office of the State Comptroller]. A Commonwealth Terms and Conditions will be incorporated by reference into and shall apply to any Contract for Commodities and/or Services that is executed by the Bidder and Sheriff’s Office.
c. Standard Contract Form: An authorized signatory of the Contractor and the Sheriff’s Office must execute a Commonwealth of Massachusetts Standard Contract Form for all Procurements under this policy.
Section .05(11) of the policy states that contracts with lawyers are exempt from competitive procurement requirements but that a Competitive Procurement Exception Explanation Form must be completed and kept on file.
Reasons for Noncompliance
SDE’s management stated that that the prior administration did not enforce its procurement policy and decentralized the procurement process, allowing people who lacked knowledge of SDE’s procurement requirements to procure goods and services without the involvement of the Procurement Department. As a result, the Procurement Department did not receive the required procurement documents for its file. SDE’s current management also told us that the former Sheriff completed contract procurements without using the Standard Contract Form. Further, SDE’s current management stated that procurement files were all hard copies and some might have been destroyed in a flood at the Salisbury Office of Community Corrections, where the records were in storage. However, SDE could not definitively state which records were lost.
Recommendations
- SDE’s Procurement Department should complete all SDE purchases and complete and maintain required procurement-file records, including evidence of bids or Competitive Procurement Exception Explanation Forms.
- SDE should communicate its procurement policy to all staff members and ensure that all employees who initiate purchases receive training on procurement compliance.
Auditee's Response
It has been recognized by SDE senior staff that consistency and record-keeping of required procurement documentation has been an exposure to the new administration. Corrective action includes having hired a new seasoned Procurement Director who brings extensive experience in CommBuys, large-scale procurements, and internal control compliance. Additionally, SDE is presently piloting a procurement management module within an open source client relationship management (CRM) software suite that will streamline requesting goods and services, manage micro-budgets within the department, dramatically increase transparency into procurement, and serve as a digital repository for all procurement related documentation. There will be systemic checks and balances that will block purchases that lack supporting documentation. Additionally, each procurement file will be noted as to how the good/service was competitively procured (i.e., CommBuys solicitation, statewide contracts, quotes). Any purchase that is not a competitive procurement will include the Competitive Procurement Exception Explanation Form signed by an authorized signatory of the department.
Auditor's Rely
Based on its response, SDE is taking measures to complete and maintain required procurement-file records, but it should also ensure that staff members are aware of its procurement policy and that all employees who initiate purchases receive training on procurement compliance.
| Date published: | August 27, 2018 |
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