Purpose

To determine if the State University of New York’s (SUNY) internal controls over procurement ensure goods and services are obtained competitively and at reasonable prices. The audit covers the period April 1, 2012 through September 3, 2014.

Background

The State University of New York (SUNY) consists of 64 colleges located throughout the State and a central administrative office (System Administration) located in Albany. SUNY’s non-personal services expenditures are more than $3 billion annually. System Administration is responsible for establishing policies that are in compliance with applicable State procurement laws, rules, and regulations. The Education Law grants SUNY increased flexibility in obtaining goods and services, both through less stringent purchasing and procurement requirements and through higher dollar thresholds for specific purchasing requirements. System Administration generally allows campuses to operate their procurement functions autonomously, but has issued procurement guidelines that campuses are expected to follow to ensure goods and services are obtained at reasonable, competitive prices.

Key Findings

• SUNY officials have generally established good internal controls over procurement and have effectively communicated these procedures to the campuses. Our tests at seven campuses and System Administration found they don’t consistently follow some of these procurement policies. For example, of 924 procurements we reviewed, 97 in the $500 to $250,000 range and totaling more than $1.1 million lacked required documentation to demonstrate that the price was reasonable.
• In some cases, campuses need to be more compliant, but in other areas – such as the current limits on procurement card transactions – SUNY should consider revising its policies to be more in line with actual business practices, which could allow greater focus on higher-cost and higherrisk transactions.
• We also identified some campus practices that go beyond SUNY’s requirements to manage cost and could serve as best practice examples if more widely shared among the campuses.

Key Recommendations

• Remind campuses of the need to comply with important procurement policies, including, but not limited to, documenting that prices are reasonable.
• Update the procurement card policy related to cardholders’ transaction limits to be more consistent with campus needs and business practices.
• Enhance efforts to encourage campuses to identify, share, and adopt common best practices to manage costs and ensure efficiency.

Other Related Audits/Reports of Interest

State University of New York System Administration Office: Selected Employee Travel Expenses (2012-S-100)
Stony Brook University Hospital: Health Information Management Department - Selected Procurement and Human Resources Practices (2012-S-38)