Report 2023-133 Recommendation 2 Responses

Report 2023-133: City of Anaheim: It Has Not Properly Managed Tourism-Related Contracts and Millions of Dollars in Related Funds (Release Date: January 2024)

Recommendation #2 To: Anaheim, City of

To ensure better stewardship of public funds, Anaheim should by January 2025 develop a contract management, monitoring, and oversight process that aligns with the practices set forth in the corresponding provisions of the State Contracting Manual. Specifically, the city should implement policies and procedures for its professional services contracts that require it to track contract deadlines, deliverables, and contractors' use of funds, and it should perform periodic compliance audits and reviews of contractors' financial records.

1-Year Agency Response

December 2024

- Establish a contract management system (OpenGov and CGI) that will be used as a centralized repository of contracts, as well as contract development and workflow. This allows for proper review of contracts, and templates to ensure proper definitions of deliverables and deadlines.

- Purchasing Division, City Manager, City Attorney, Risk Management, and City Clerk departments will be involved and provide oversight of contracts from development, completion and execution.

January 2025

- Conduct training sessions for city staff on how to use the contract management system, and contract development.

- Ensure all new contracts moving forward are developed and recorded within the contract management system.

February to June 2025

- With the contract management system now fully implemented, the Finance Department will hold separate meetings by department to review existing and active contracts that should also be migrated into the contract management system.

- Once all active contracts have been migrated, the Finance Department will not issue vendor payments unless they are verified within the contract management system. The effective date of this requirement will be July 2025.

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

The city of Anaheim has partially implemented our recommendation by its use of a newly adopted contract monitoring system, but it has yet to perform periodic compliance audits and reviews of contractors' financial records.

6-Month Agency Response

The Finance Department has reviewed the referenced documents of the State Contracting Manual and identified opportunities to best incorporate the practices into the City's policies and procedures related to professional services.

The general timeline has been delayed due to the recent resignation of the city's Purchasing Agent who is a key stakeholder of the overall effort. We completed the hiring of a new Purchasing Agent and plan to continue with the original plan laid out below.

Draft edits to applicable policies and procedures have been completed and we are working to engage key stakeholders from all departments to review, receive input and confirm the practical application of the proposed edits. Estimated time frame to complete: 2 months.

Once the draft reaches consensus, the initial implementation will include several training sessions to be provided by the Finance Department. This will include information training sessions with departments on contracting guidelines and best practices and hands-on training sessions in the use of the City's CGI ERP system to register and track professional services contracts. Estimated time frame to complete: 3-4 months.

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

60-Day Agency Response

The Finance Department has reviewed the referenced documents of the State Contracting Manual and identified opportunities to best incorporate the practices into the City's policies and procedures related to professional services.

Draft edits to applicable policies and procedures have been completed and we are working to engage key stakeholders from all departments to review, receive input and confirm the practical application of the proposed edits. Estimated time frame to complete: 2 months.

Once the draft reaches consensus, the initial implementation will include several training sessions to be provided by the Finance Department. This will include information training sessions with departments on contracting guidelines and best practices and hands-on training sessions in the use of the City's CGI ERP system to register and track professional services contracts. Estimated time frame to complete: 3-4 months.

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

All Recommendations in 2023-133

Agency responses received are posted verbatim.