Grand jury says Modesto fixing problems that contributed to $16M in overspending
Modesto has taken big steps in fixing the breakdown in its purchasing practices that resulted in the city spending about $16 million over several years than had been authorized by the City Council or by the actual agreements.
That’s among the findings from the Stanislaus County Civil Grand Jury, which issued reports last month of its investigations over the past year of local government operations.
The grand jury “investigation found that issues which caused the underlying problems (in Modesto’s purchasing practices) are being substantially addressed,” states the report on Modesto. But the grand jury recommends the City Council move forward with hiring a city auditor, who would provide more oversight of city operations.
The grand jury investigation mirrored what The Bee and Modesto have reported about the breakdown, whose causes included a lack of staff and training. But the investigation stated the city has taken steps to address the shortcomings, including hiring more purchasing staff.
City officials have stressed Modesto’s review did not turn up evidence of fraud, and the city received the goods and services it paid for. City officials said the problem was purchasing division employees extended contracts and increased contract amounts without approval. And the departments that used the agreements were lax in monitoring them.
“We noted an overall environment in the purchasing department where work flow seemed in excess of staff resources and manpower,” according to a report by the CPA firm Hudson Henderson & Co., one of the consultants the city brought to help with its investigation.
“While controls were in place, they were circumvented to ensure the operations of the City continued and to ensure bills were being paid for the work being performed,” the report also stated. “The purchasing department was under constant pressure from other City departments, vendors, and management to maintain status quo and keep the operations of the City functioning.”
This story was originally published July 9, 2019 at 8:36 AM.
