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December 7, 2012

 

DiNapoli: Ulster County Waste Management Agency Likely Overpaid for Services

The Ulster County Resource Recovery Agency likely overpaid for landfill use, waste hauling and fuel because of questionable bidding practices, according to an audit released today by State Comptroller Thomas P. DiNapoli.

From January 2010 through October 2011, DiNapoli’s auditors tested $16.7 million in agency purchases requiring public bidding or solicitation of multiple quotes and found eight of 20 procurements (totaling $8.5 million) did not conform to the policies established by the agency board. In addition, the agency did not use competition to procure fuel and some hauling services.

“It appears that agency officials have not ensured that they used public dollars in the most prudent and economical manner,” said DiNapoli. “In too many instances, my auditors found the agency ignored its own policies or failed to enact adequate procedures governing purchasing decisions. Ulster County residents have a right to expect better use of public resources.”

The agency collects solid waste and recyclable materials from independent trash collectors, contractors, town transfer stations and the general public. The majority of agency costs are incurred disposing waste to larger landfills, as well as trucking the waste and purchasing fuel.

The largest contract reviewed by the Comptroller’s auditors involved the agency’s use of a landfill for bulk waste disposal.

Currently, the agency pays to transport its solid waste to a landfill 235 miles away from its main transfer station using long-haul trucking companies. The agency paid Seneca Meadows Landfill, located in Waterloo, NY, $4.6 million during the audit period without considering closer or cheaper alternatives. The original contract was bid in 1999 and has been subsequently renewed multiple times without any consideration of alternative options.

Auditors also noted that the agency awarded a contract for the hauling of waste to landfills to a vendor that did not meet requirements set forth in bidding documents. The vendor, who was paid $388,515 during the audit period, did not possess the necessary experience, qualifications and insurance coverage called for in the agency’s request for proposals.

Additional audit findings include:

  • The agency purchased heating fuel and off-road diesel fuel from a local company without seeking competition. The total cost for this fuel was about $233,000 during the audit period;
  • The agency incurred $75,700 in expenditures purchasing tires and employee uniforms without a formal bidding process;
  • The agency received sludge from local municipalities and transported it nearly 400 miles to a landfill in Niagara Falls, NY. During the audit period, the agency paid the landfill nearly $102,000 without considering disposal alternatives; and
  • The agency has not developed comprehensive procedures to ensure that the sale of recyclable materials results in optimal revenue.

DiNapoli made a number of recommendations to the agency, including:

  • Develop procedures to ensure that the requirements concerning quotes or bids included in the procurement policy are being met;
  • Award contracts to vendors that meet all specifications in the bidding documents.
  • Develop comprehensive guidelines and procedures to ensure that the sale of recyclable materials is performed in an open, transparent, and competitive way, with documented oversight and approvals.

For a copy of the report and to read the response from agency officials, visit: http://www.osc.state.ny.us/localgov/audits/counties/2012/ulster.pdf


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