Rialto Unified School District

Contract and Purchasing Review

January 8, 2014
Study team:
Sue Daniel, FCMAT consultant Leeann Errotabere, FCMAT consultant John Von Flue, FCMAT staff

Study Scope
Review districts purchasing functions
Using a samp ing of transactions and contracts, interviews with staff, and other documents!
Review po icies, processes, and procedures and provide recommendations to increase efficiency, reduce costs, comp y with ega re"uirements, and fo ow #est practices$ Review interna contro s$

Report sections
Purchasing Overview Board Policies Staffing and Organization Contracts and Purchasing Process Bidding Process Accounts Payable Conflict of nterest !ransactions Review Purchasing " Credit Cards #$ployee ncentives " Awards

Purchasing Overview
%n oca education agencies &'()s*, inc uding schoo districts, the process of purchasing supp ies, e"uipment and services is dictated #y statute, oca #oard po icy, and district procedures and practices$ +ections of the (ducation ,ode, -u# ic ,ontract ,ode, .overnment ,ode, and ,a ifornia ,ode of Regu ations provide the ega #asis and parameters within which a schoo district must conduct its purchasing functions$ /oard po icies, regu ations, procedures and guide ines add contro s that are designed to protect schoo districts #y meeting various purchasing and contract needs efficient y whi e considering owest cost and highest va ue$ .enera guide ines and #est practices for '() purchasing inc ude! 1$/oard po icies and regu ations to provide the foundation and e0pectation that purchasing fo ows ega re"uirements, provides strong interna contro s and meets procurement o#1ectives$ 2$2esignation of staff mem#er&s* responsi#i ities and authority throughout the purchasing process$ 3$+tandardi4ed procedures for vendor se ection, re"uisition generation, and issuance of purchase orders$ 5hese procedures shou d a so esta# ish competitive #idding processes to ensure prudent and optima use of funds and appropriate minimum standards and compati#i ity re"uirements for supp ies and services$

Board Policies
Reco$$endations Regularly review and update board policies and ad$inistrative regulations to ensure they re$ain relevant and reflect the latest statutory re%uire$ents and district ob&ectives' #nsure e$ployees are aware of board policies and that policies re$ain accessible for public and staff reference' #stablish regular training on the identification and prevention of fraudulent activity for all business staff'

Staffing and Organization

Reco$$endations Regularly review and update &ob descriptions to ensure they accurately reflect position %ualifications( re%uire$ents( duties( and supervision' Regularly review and ad&ust the duties of purchasing staff and staffing levels to fit fluctuations in wor)load and"or to adapt to new trends and procure$ent de$ands' Record these ad&ust$ents on the Areas of Responsibility chart for purchasing staff accountability and co$$unication to district staff' *aintain a segregation of duties'

Staffing and Organization

Provide regular training and discussion on internal controls and their i$portance' nclude designated purchasing staff in district $eetings that pertain to or affect purchasing services such as construction $anage$ent( end+of+year( start+of+year( special grant"pro&ect $eetings( etc'( to i$prove co$$unication with all involved' Regularly train and cross train staff regarding proper application of all policies( regulations and procedures'

Contracts and Purchasing Process

Reco$$endations Regularly update des) $anuals and docu$ented processes' Re%uire all contracts to be processed through the purchasing and accounts payable depart$ents to ensure the proper procedures are followed( services are not duplicated( and funding is available'

Bidding Process
Reco$$endations
Continue to align the $aterials( supplies( and public wor)s pro&ect bid thresholds to the thresholds re%uired of all ,+-. local educational agencies in California' Continue utilizing the Unifor$ Public Construction Cost Accounting Act Procedures /pursuant to PCC Section ..0001 for s$aller public wor)s construction pro&ects' Offer ongoing professional develop$ent for Purchasing Depart$ent staff'

Accounts Payable
Concerns e2pressed by staff3
te$s purchased on credit cards by top ad$inistration 4erification of receipt of goods and services Unauthorized e$ployee incentives 5ac) of cross training of staff in other depart$ents

Reco$$endations
Review concerns and needs addressed by the accounts payable staff' #stablish procedures and syste$s to address those concerns dee$ed valid'

Conflict of nterest
Reco$$endations #stablish and i$ple$ent a vendor verification process to use for all new vendors and an annual review of the vendor $aster file' Consider establishing and i$ple$enting a vendor affir$ation process'

!ransactions Review
Reco$$endations Re%uire proper bac)up docu$entation to ensure appropriate procure$ent procedures were followed' Review costs of vendor contracts and pay$ents to ensure reasonable and appropriate rates as well as a not+to+e2ceed contract a$ount'

!ransactions Review
Reco$$endations #nsure the vendor contracts clearly identify services to be delivered and do not overlap to prevent duplicative services and billing' nstitute a process to ensure consultants do not $eet the definition of e$ployee' #nsure there is no conflict of interest wherein the person authorizing the contract also benefits fro$ its acceptance'

!ransactions Review
Reco$$endations #nsure that orders are processed with proper district re%uisition sub$ittal to the Purchasing Depart$ent' Prohibit the processing of contracts that circu$vent the procure$ent syste$' #stablish a district environ$ent led by the board of trustees and the highest level of ad$inistration of high ethical conduct and no tolerance for inappropriate actions'

Purchasing " Credit Card

Reco$$endations
Adopt and enforce a policy of purchasing " credit cards use that is fair and consistently applied' !his policy should include restriction and"or ter$ination of use for nonco$pliant card holders' #ducate all users in the proper use of purchasing " credit cards through for$al training sessions( and re%uire cardholders to sign a contract stating that they understand and agree with the use policy' Provide use of a card for the purchasing depart$ent to facilitate and strea$line purchasing'

#$ployee ncentives " Awards

Consider adopting a policy for e$ployee incentives and"or awards' Review current practices and cease those that do not align with or are not allowed by board policy( including e$ployee incentives and awards' Review and align procure$ent procedures to ensure $a2i$ization of purchasing value'

6uestions7