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For the third time, city of Modesto staff spends more than it’s supposed to

JOAN BARNETT LEE / jlee@modbee.com Tenth Street Place is pictured in 2011
JOAN BARNETT LEE / jlee@modbee.com Tenth Street Place is pictured in 2011 Joan Barnett Lee

The City Council will be asked Tuesday to correct another instance of Modesto officials buying more goods and services than what the council had authorized.

The council in this instance approved in September 2014 spending $350,000 over five years with two firms to conduct background checks for potential new hires with the Police Department.

A city report states the amount was insufficient for the number of background checks actually needed, and the Police Department worked with the Finance Department’s purchasing division to increase spending for background checks. The report states Modesto spent nearly $164,000 more than authorized by the council. And some of that spending was done by two additional companies the city hired without council approval.

Some of the background checks also were conducted for the Fire Department and Information Technology. Police Chief Galen Carroll said his department relied on purchasing to provide guidance in this matter. “I’m not trying to not take responsibility,” he said, “but we relied on the gatekeeper (purchasing) as the expert about what you are supposed to do and not supposed to do.”

City officials have blamed the purchasing division for increasing the amounts of contracts and extending contracts without approval. This is the third instance that officials have brought to the council. Officials have blamed former employees for some of the problems.

The first instance was in September when Modesto spent about $2.2 million more for asphalt repair work than authorized by the council, and the second was in October when Modesto spent more $113,000 for printing, mailing and similar services. Officials have said they have found 11 instances in which Modesto spent more than what was authorized by the council or the contract.

The problems have surfaced as the city is reviewing its contracts and contract administration. It also has brought in a CPA firm to conduct an audit. Interim City Manager Joe Lopez has said Modesto will release the findings of its review and audit once they are completed.

Regarding the background investigations, Modesto hired Simpson Investigative Services and Rank Investigations at cost of $175,000 each over five years, with Simpson designated as the primary contractor and Rank the secondary. A city report says purchasing increased the amount that could be spent under the Simpson contract to $500,000 without council approval.

The report says purchasing also added two more companies: Noonan & Hart Investigations and STI Investigations and put in $345,000 and $45,000 in spending authority, respectively, for the two companies. This also was done without council approval.

The report says Modesto spent $54,653 more under the Simpson contract than what was authorized, $88,436 with Noonan and $20,677 with STI for a total of $163,766 in unauthorized spending. The council will be asked to retroactively approve the spending and increase the spending authority for the three firms by $287,100 for future work.

Modesto has paid Rank $39,272 for background checks and owes it $1,240, which is below what was authorized in its contract with the city.

The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St.

Kevin Valine: 209-578-2316

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