City officials promise to fix bidding problems

Sunday, March 21, 1999 | 9:17 a.m.

"On behalf of the city, it is our intent to clean this up and clean it up quickly," Deputy City Manager Steve Houchens told the city Audit Oversight Committee.

The recently formed panel met Friday for the first time in three months to consider the purchasing and contracts audit and other matters. They accepted a list of finalists for the position of city auditor and said the subjects of audits need to be given a chance to respond to the findings before reports are released.

The purchasing and contract audit was performed by acting City Auditor Philip Cheng after a whistle-blower reported the case. Cheng found that $160,000 worth of office supplies were purchased in 1997 without a public bid, a violation of state law.

When an office supply contract was awarded in November 1997, it followed a bid procedure that appeared tailored to favor the company that received the contract, Advance Marketing, the report stated.

The city lost at least $80,000 per year as a result of the purchasing practices, according to the audit.

"I'm not saying anyone did anything improper," committee Chairman Bill Martin said, "but in my opinion, that (the bidding procedure) is very invalid."

The panel did not discuss referring the matter to the Metropolitan Police Department, but City Manager Virginia Valentine has said she would do so if an internal investigation indicates there was criminal activity.

In addition, the audit outlined a range of problems in the city's purchasing and contracts division - from the lack of a standardized procedure for awarding contracts to criticism of how sealed bids are physically handled.

The committee also discussed the hiring of a new auditor. Human Resources Director Rick Anderson presented the panel with a list of 11 finalists he said were chosen based on objective criteria, such as level of education and years of management experience.

The finalists will be interviewed over the next several months and then chosen by the audit committee, subject to the City Council's approval.

The city auditor job has been vacant since March 1998, when Susan Toohey was fired without explanation. She is suing the city for $3.8 million, saying she was terminated for seeking reforms management didn't agree with.