[read complete report – pdf] 

Audit Objective

Did City of Mechanicville (City) officials procure goods and services in accordance with the City’s procurement policy, statutory requirements and good business practices?

Audit Period

January 1, 2022 – September 30, 2024

Understanding the Audit Area

One of the best methods for helping ensure that goods and services are acquired in a cost-effective manner is to seek competition, which is often required by State law or by locally adopted policy. One of the goals of seeking competition is to foster honest competition to obtain quality commodities and services at the lowest possible cost. Seeking competition also guards against favoritism, extravagance and fraud, while allowing interested vendors a fair and equal opportunity to compete. Whether using formal competitive bids, requests for proposals (RFPs)¹ or written and verbal quotes, a well-planned solicitation effort is needed to reach as many qualified vendors as possible.

City officials made 3,808 payments for purchases totaling approximately $19 million in goods and services during the audit period.

Audit Summary

City officials did not always procure goods and services according to the City’s procurement policy, statutory requirements and good business practices. As a result, officials made purchasing decisions without proper oversight, did not maintain adequate financial and purchasing records and did not always use a competitive process when procuring goods and services. Officials also did not establish adequate procurement guidelines. Without clear purchasing guidelines and adequate oversight of the purchasing process, the City could pay inflated prices, inefficiently spend public funds, incur legal liability and diminish public trust in the City’s operations.

During our review of the City’s procurement policy and process, we identified the following discrepancies:

• City Department heads did not always comply with the procurement policy or document whether they used competitive bidding, as required by the policy. We reviewed a sample of 35 purchases totaling $2.26 million and identified that 23 purchases totaling approximately $760,000 (34 percent) did not comply with the procurement policy or statutory requirements. For example, competitive bidding was not used for five purchases totaling $608,000 that exceeded $20,000, quotes were not obtained for 13 purchases totaling $106,500 that were between $2,000 and $20,000, and RFPs were not issued for five purchases totaling $44,900 where required. 
• The City’s Commissioner of Finance (Commissioner) and Deputy Commissioner of Finance (Deputy) did not verify that each purchase included the correct number of written or verbal quotes before paying vendors. Without these reviews and Verifications, purchases might not comply with the procurement policy and potential financial discrepancies could occur. 
• The City’s procurement policy was inadequate and inconsistent, which created confusion and increased the risk that staff would not comply with required procurement practices. The City also did not have formal, written procedures for its purchasing process or specific procurement guidelines for professional services in the procurement policy. 
• The city did not have an individual designated as its official purchasing agent. Instead, each Department head was responsible for purchasing within their respective departments. This approach could result in varied practices and challenges with maintaining uniformity across departments. 
• The procurement policy required Department heads to verify that funds were available before making purchases. However, the City’s Finance office did not have updated accounting records, which made it difficult for Department heads to ensure that there were adequate funds for their purchases. Consequently, they made purchases without confirming there were available budget appropriations, which led to financial discrepancies and inefficiencies. 

The report includes 13 recommendations that, if implemented, will improve the City’s procurement practices and ensure economic use of public funds in the taxpayers’ best interests. City officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.

We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law (GML). Our methodology and standards are included in Appendix C.

The City Council (Council) has the responsibility of initiating corrective action. We encourage the Council to prepare a written corrective action plan (CAP) that addresses the recommendations in this report and forward it to our office within 90 days. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Council to make the CAP available for public review.

1 An RFP provides detailed information on the type of goods and services needed, and the evaluation criteria used to award the contract. Obtaining written proposals through an RFP process is an effective way to procure goods and services at the best value and document how service provider selections are made.