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March 14, 2013

DiNapoli: Nassau County Needs to Improve Contract Process

While Nassau County is following established guidelines for approving contracts, the authorization process often misses approval deadlines, according to an audit issued today by State Comptroller Thomas P. DiNapoli. Auditors found that because of the lengthy review process vendors began working on half the contracts an average of seven weeks prior to the contract being signed by the county.

Auditors reviewed 29 contracts equal to or greater than $50,000 approved between Jan. 1, 2010 and March 31, 2012, 22 of which were subject to approval within 45 days. All of the contracts auditors examined followed the approval path as mandated by the county charter; however, 7 of the 22 contracts exceeded the required 45 day limit, taking up to 156 days to be approved. Nassau County is required to authorize contracts in accordance with its county charter and the directives of the Nassau Interim Finance Authority (NIFA) control board.

“The county has implemented a thorough contract approval process, but there are delays that must be eliminated,” said DiNapoli. “County officials need to identify and implement corrective actions that would make the process more efficient while maintaining proper oversight.”

The current contract approval process is complex. It includes six separate county offices and is subject to a maximum 45-day approval path. The approval process currently requires:

  • Review and approval by the initiating department head;
  • Certification by the county office of management and budget;
  • Approval from the county attorney’s office and county comptroller’s office;
  • Review by the county’s office of legislative affairs;
  • Review and approval by the county executive and county legislature; and
  • Final approval from the Nassau Interim Finance Agency.

Auditors found the average time to approve contracts was 46 days before NIFA instituted additional guidelines. After that, the contract approval process increased to an average of 85 days. However, most of the increase was not attributed to NIFA’s actual review, but to the review at the county level.

Due to the lengthy process for approving contracts, county officials are allowing services to be performed by vendors prior to the ratification of contracts. Auditors found that work on 15 of the 29 contracts began on average 49 days prior to the contract being signed and executed by the county. This practice could preclude the county from enforcing the terms and conditions of the contract in the event the vendor’s performance had been substandard.

DiNapoli said county officials should review contracts where services are provided before being signed, determine the cause of the delay and make the process more efficient.

DiNapoli also recommended county officials:

  • Eliminate or combine multiple contract approval stages within the same department;
  • Develop a process for prioritizing the approval of contracts for essential services so that vendors can provide those services at the earliest possible time. This should eliminate the practice of having vendors begin work before contracts are approved; and
  • Meet with NIFA officials to review and update the contract approval guidelines to ensure they are comprehensive, clear, concise, and consistently applied.

For a copy of the report visit: http://www.osc.state.ny.us/localgov/audits/counties/2013/nassau.pdf

 



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