Report 2011-131 Recommendation 14 Responses

Report 2011-131: City of Vernon: Although Reform Is Ongoing, Past Poor Decision Making Threatens Its Financial Stability (Release Date: June 2012)

Recommendation #14 To: Vernon, City of

To better control contract expenditures and ensure that it receives the best value for the services it purchases, the city should require all contracts to have expenditure limits and starting and ending dates for services performed.

1-Year Agency Response

On December 18, 2012 (effective January 17, 2013), the City Council adopted Ordinance No. 1200, the Competitive Bidding and Purchasing Ordinance. Section 2.17.30(A) of the Ordinance requires all contracts, including professional service contracts, to include ending dates and/or expenditure limits. On February 25, 2013, the City Council adopted Resolution No. 2013-23, approving the general forms of personal service contract, types of insurance and indemnity, purchase order contracts, requests for proposals, and attorney services contracts. All of these forms of document contain the recommended good governance provisions, including expenditure limits and time limits not to exceed three years. On June 25, 2013, the Finance Department issued the City of Vernon Purchasing Manual to all City departments, as adopted by the City Administrator pursuant to the City's Competitive Bidding and Purchasing Ordinance (Ordinance No. 1200). The Purchasing Manual was prepared by the Finance Department, with significant input from the City Attorney's Office and all City departments. The Purchasing Manual sets forth all of the requirements of the Purchasing Ordinance as they apply in a practical manner to the day to day operation of the purchasing system. It includes a method of contract routing (Contract/Amendment Signature Routing Form) that ensures every affected department receives information about each contract before it is signed or approved pursuant to the City's good governance contract requirements.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

In February 2013 the city council approved the general forms for various types of contracts and purchases. These templates for contracts and purchasing include requirements to specify starting and ending dates for services and expenditure limits.

6-Month Agency Response

In December 2012 the city council adopted a competitive bidding and purchasing ordinance to require all contracts, including professional services contracts, to include ending dates and or expenditure caps. However, this ordinance is not effective until July 1, 2013 to allow for a transition period for existing agreements. By the end of June 2013, the city expects to adopt a purchasing manual which will set forth requirements of the ordinance for the day-to-day operations of the purchasing system. The city expects to establish standardized forms that will include start dates, maximum terms, and limits on dollar amounts.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The city states that a top priority for its recently appointed city attorney will be to develop a comprehensive contracting policy resolution for city council approval, but it did not give a time frame for completion. (See 2013-406, p. 192)

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2011-131

Agency responses received after June 2013 are posted verbatim.