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City of Laguna Niguel News

Posted on: August 18, 2017

Press Release: City Takes Additional Steps to Improve Accountability

Laguna Niguel, CA – Taxpayer dollars are managed responsibly and in the best interest of the community. The City is financially healthy and well-managed, with prudent reserves and a balanced budget. To further improve contract management and spending, the following additional measures and best practices have been implemented to improve the procurement process and enhance transparency: 

1. Conduct Employee Training (completed): Employee training is key to educating and reminding staff about the City’s purchasing protocols and expectations. The City held two employee purchasing trainings earlier this summer, which focused on employee roles, purchasing authority thresholds, and the overall procurement process. These are outlined in the Purchasing Policy; a document that guides staff through the purchasing process as in accordance with state and federal laws, and the City’s Municipal Code.  Subsequent trainings will be scheduled as appropriate to communicate any updates to purchasing or contract processes, as well as train newly hired employees who may procure goods or services on behalf of the City.

2. Develop a Financial Vendor Report and Contract Tracking Form (in progress): The Finance Department distributed a vendor balance report and a contract tracking management form to departments. The vendor balance report helps departments review their current expenditures for their respective vendors while the tracking form will help manage contract spending levels on a real-time basis. 

3. Perform an Operational Audit (in progress): At the August 15 City Council meeting, Council directed staff to begin preparing a scope of work for an engagement by an independent firm to review or audit the operational aspects of citywide purchasing and contract processes. The purpose of this engagement will be to evaluate the level in which the City’s operating procedures are effectively and efficiently functioning with respect to purchasing and contract administration. City staff will issue a Request for Proposal once the Council approves the draft scope of services at the September 5 Council meeting. Once a qualified vendor has been recommended, a professional services agreement and a corresponding budget appropriation will be placed on a future Council meeting agenda for approval. 

The City’s independent auditors, The Pun Group, will share their findings for the final “Agreed-Upon Procedures Applied to Purchase Orders and Contract Processes” report at the September 5 Council meeting, at which time, the Council may determine if an additional agreed-upon procedures engagement related to purchasing and/or an ad-hoc committee are needed. 

4. Compile a Contracts Report (in progress): Staff is reviewing all vendors to identify existing contracts that require additional compensation or scope modifications, along with potential new contracts currently in process. This list is intended to be presented to the City Council at the September 19 Council meeting.

5. Implement New Contract Terms (in progress): The contract terms for new and amended contracts will follow the fiscal year calendar (July 1 - June 30) to help with fiscal year budgeting. Therefore, commencement of newly contracted services will begin July 1 or after, and end June 30. 

6. Upgrade to an Integrated Municipal Enterprise Resource Planning Software Solution (in progress): The new finance software system is one of the largest investments to help better monitor contracts and purchases. Among one of the many key features of the new electronic system is the stoppage of payments to vendors if invoices exceed the contract amounts. This will alert project managers to review their contracts to ensure there are sufficient funds before making payments. The project implementation period takes approximately 9-12 months with the system expected to be fully operational by late Summer or early Fall 2018.

The City is taking great strides to work together to identify solutions to further enhance transparency, strengthen internal controls, and improve financial accountability to residents. 
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City of Laguna Niguel
30111 Crown Valley Parkway
Laguna Niguel, CA 92677
Tel: (949) 362-4300
Fax: (949) 362-4340

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