City eyes options to control finances
By Gordon Dritschilo
Staff Writer | August 23,2013
The city is considering flagging new vendors and creating a more defined policy on purchase orders.
The Board of Finance held a special meeting Thursday to discuss ways of strengthening the city’s financial controls.
The board — consisting of the mayor, treasurer and president of the Board of Aldermen — is responsible for reviewing and approving all expenditures before checks are sent out.
The discussion was triggered by the discovery that former recreation superintendent EJay Bishop spent roughly $47,000 on architectural services, circumventing the procurement process by breaking the work down into chunks that were just under the $3,000 threshold at which the city sends purchases out to bid.
Mayor Christopher Louras opened the meeting by describing how the purchases were found. As part of the year-end accounting procedure, the city’s internal auditor used a spreadsheet to look at all companies that got more than $5,000 from the city to see what was bought from them. This brought the invoices from Bear Mountain Design to the attention of the treasurer’s office.
“The only way I think we could have caught this earlier is to do this same roll-up monthly, or bimonthly or quarterly, rather than annually,” Louras said.
City Treasurer Wendy Wilton said she would look into time and cost but was lukewarm to the notion, saying the end-of-year procedure is not intended to catch such misuse of funds — even if it did in this instance.
“I think there are other solutions that are better than that,” she said. “I’ve been thinking about purchase orders, tightening that up.”
Wilton said purchase orders are generally used on “big-ticket items.”
“We’re not using it on a regular basis,” she said. “We use it, but there aren’t really hard and fast rules about when you’re supposed to have one.”
Wilton also pointed to the fact that Bishop was spending out of the recreation activities fund — a special fund created from nontax revenue that comes into the Recreation and Parks Department — as an example of the need to have the fund’s purpose better defined.
“You know what you’re going to use the bridge fund for,” she said. “You’re not going to use it to fix the swimming pool. ... You notice this didn’t happen in the general fund. It happened in a fund where there hadn’t been good guidance, where there hadn’t been direction from the policy-makers.”
Louras also noted that implementing a function in the city’s accounting software that flagged a new vendor for review would be beneficial — the city had not done business with Bear Mountain Design previous to this incident.
The board agreed to research the options it had discussed and talk further, adjourning without taking action.