Warner Letter to Brad Rafish TKW RE Audit September 13 200…

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• Publié par: Udde
• Nombre de lectures: 28
• Langue: English

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September 13, 2005 Mr. Brad Rafish, Partner Talbot, Korvola and Warwick, LLP 4800 SW Macadam, Suite 400 Portland, Oregon 972393973 Reference: PerformanceAudit of PDC Contracting Activities for the  PeriodJuly 1, 2003 through June 30, 2005 Dear Mr. Rafish: On behalf of our Board of Commissioners, thank you for your timely completion of this audit. Overall, we agree with your assessment that our “current Local Contract Review Board Administrative Rules and required forms are very specific and thorough and, as written, provide good direction in respect to assuring the agency’s objective of maintaining a fair and objective solicitation process” and that “these rules and requirements have not been followed consistently by all PDC employees involved in the contracting process.” The findings and recommendations you offer in your report will serve as an important guide for us as we make improvements to our policies and business processes. The following responses are offered to specific findings and recommendations contained within the audit report. Contracting Process It is clear from the report that the Portland Development Commission (PDC) has good policies and procedures in initiating new contracts.These policies conform to State guidelines and are in many respects as good as, or better than, other governments contacted by Talbot, Korvola and Warwick, LLP (TKW).We agree that staff at all levels have not consistently followed these rules and/or kept appropriate records demonstrating that the rules were followed.It is important to point out, however, that all of the contracts entered into were legal and valid and services rendered provided value to PDC.The causes for the exceptions found were not specifically identified.The report does suggests that PDC consider centralizing the authority for PDC contracting activities and provide better training

Mr. Brad Rafish, Partner Page 2 September 13, 2005 to managers as ways to improve our performance in this area.We agree that implementing a comprehensive records management program, with specific guidelines on managing contract files, will also enhance the quality of our contract records. Recommendation #1─“We recommend the Portland Development Commission establish a centralized procurement function that has more formal authority and responsibility for coordinating/facilitating the contracting process.” We agree that centralization of procurement functions may be beneficial and plan to thoroughly review our procurement process, and take the following actions: Immediate (within 30 days): ƒInstitute a procedure to standardize and expand justification requirements for requests to exempt contracts from competitive solicitation. ƒIdentify a team to review our current procurement process and revise as necessary to ensure a proper balance of internal controls and efficient procedures (including centralization of some or all responsibilities). Within 90 days: ƒPublish a Purchasing Manual that will include detailed information regarding procurement process steps. ƒUse new Purchasing Manual to train PDC staff. ƒConclude evaluation of procurement process including centralization options, and make recommendations. ƒManagement review and approval of recommended new or revised policies and processes. Within 120 days: ƒImplement new/revised procurement policies and procedures as needed. ƒProduce documentation and templates for new procurement policies and process. ƒUpdate Purchasing Manual. ƒReorganize and/or realign staff responsibilities to implement revisions to procurement process. ƒTrain staff regarding new policies and procedures.

Mr. Brad Rafish, Partner Page 3 September 13, 2005 Contract Administration The report also finds that PDC needs to improve documentation of contractor performance and contractor compliance with contract terms.In this case, TKW found weaknesses in standardized procedures for determining PDC received goods or services per the scope of work in the contract.This means that it was sometimes unclear based on the information in the contract file that receipt of appropriate goods and services, per the terms of the contract, were verified.This does not mean that goods and services were not properly received but that the auditors were unable to find appropriate documentation.The report suggests that PDC should consider formalizing record keeping requirements for contacts to assist in improving performance with this function. Recommendation #2─“We recommend the Portland Development Commission develop specific performance standards and criteria for each project.” We agree with this recommendation and will be taking the following actions: Immediate (within 30 days): ƒDevelop contract administration expectations and communicate them to staff. ƒDevelop a way to provide a certified Contract Administration training class to PDC employees which will enhance current training provided to staff on contracting procedures. Within 120 days: ƒOutline standard contract performance criteria in the Purchasing Manual. ƒProvide certified Contract Administration course for PDC staff and require appropriate managers to attend training. ƒImplement new or revised contract standards for delivery of work requirements and contractor performance. Records Management A central finding of your audit was that records and files were not centrally located and/or lacked appropriate documentation. Recommendation #3─“We recommend the Portland Development Commission institute a comprehensive records management policy and develop specific guidelines and rules requiring all contract information to be combined and centrally located.”

Mr. Brad Rafish, Partner Page 4 September 13, 2005 We agree with this recommendation and will be taking the following actions: Immediate (within 30 days): ƒAssign responsibility for creating and/or reviewing current public records management policies. ƒReview public contracting records management practices for revision, as needed. Within 90 days: ƒEstablish a comprehensive records management policy to address proper creation, maintenance and retention of public records. ƒDevelop specific guidelines and procedures regarding maintenance of contract procurement and administration files. ƒInclude in Purchasing Manual and training sessions specific reference to proper records management procedures for contract procurement and administration files. ƒReview alternatives and determine best procedures for combining and/or locating contract files to facilitate easy access. Ongoing follow-up In addition to the actions PDC is taking in direct response to the recommendations in the audit report, PDC will periodically check our performance. To initially assess our progress, the Internal Audit Work Plan (currently under development for 2006) will include a followup audit of contracting practices. General Clarification Overall, the report is a good review of our policies, our requirements, and our performance. Wewould, however, like to offer clarification on two “Policy Attributes” that were used in reviewing and analyzing PDC’s compliance with contracting policies. 1.Signed Copy of Contract, shown as item 3, indicates in subsection a) that numerous contracts were identified as not being appropriately signed and dated. In discussions with your firm, it has been indicated to us that a large majority of these contracts were in fact fully signed and executed but were just not dated. 2.Documentation of Business Licenses and Documentation of Equal Employment Opportunity (EEO,) shown as items 7 and 8, implies that PDC has an existing policy that requires PDC to obtain separate documents verifying the business license number and the EEO certification.We interpret our policy and contract form to require the Contractor to identify the City business license number on the contract and to certify that the Contractor is EEO certified by the City.

Mr. Brad Rafish, Partner Page 5 September 13, 2005 Additional verification documents are not currently a requirement.We will review our practices in these areas for possible improvements if we determine that there is value in collecting such documentation. Conclusion We appreciate the thorough analysis of the PDC contracting process by TKW and look forward to implementing the recommendations.We believe the actions described, and subsequently taken, will result in more effective and efficient contracting process at PDC. Sincerely,

Bruce A. Warner Executive Director tag