Purpose of Audit

The purpose of our audit was to evaluate the Town’s internal controls over purchasing for the period January 1, 2012 through February 11, 2014.

Background

The Town of Wilson is located in Niagara County and serves a population of approximately 6,000 residents. The Town is governed by a five-member elected Town Board comprised of a Town Supervisor and four council members. The 2014 Town budget includes appropriations totaling more than $3 million.

Key Findings

• The Board adopted a procurement policy that requires Town officials to solicit quotes or competitive bids, depending on the amount of the purchase or public works contract. However, the Board does not review the procurement policy annually to ensure it properly reflects the Board’s current expectations for procurement activity.
• When auditing claims, the Board did not ensure that Town officials obtained the appropriate number of verbal or written quotes for purchases, or verify that that the prices charged to the Town were appropriate government contract prices, before claims were approved for payment.
• Of 25 claims reviewed, four totaling $303,513 did not include adequate documentation to indicate whether Town officials used State or County contract pricing when making these purchases.
• The Town purchased a tractor for $45,298 and two mowers totaling $30,558 from a contract awarded by a municipality’s purchasing agency located in the State of Minnesota. However, the documentation provided by the Highway Superintendent for these purchases did not include evidence that the bid process was consistent with GML’s competitive bidding requirements and he did not perform a cost savings analysis to determine if this purchase method was cost-effective for the Town.

Key Recommendations

• Update the Town’s procurement policy, review it annually as required and adopt revisions as needed.
• Monitor for compliance with the adopted procurement policy during its audit of claims.
• Attach relevant State and County contract information to claims for the Board’s review during its claims audit process.
• Perform a cost savings analysis to demonstrate whether using another state’s purchasing agency and contracts are cost-effective for the Town.