Regional government still has shortcomings, despite 18 previous audits
Metro is not well prepared to manage large contracts, according to an audit released Wednesday.
'Contract administration works best when responsibility and authority are clearly assigned, procedures are clear, documentation occurs and action is taken. Metro had weaknesses in each of these areas,' Metro Auditor Suzanne Flynn wrote in the audit.
Once Metro awarded contracts, it did not clearly define who had responsibility and authority for enforcing them. In some cases, contract managers did not have the data they needed to effectively monitor requirements and, for the most part, Metro had no specific procedures directing how contracts should be managed. When poor performance occurred, it was not always clear what action contract managers should take,' Flynn continued in the audit, titled 'Administration of Large Contracts: Improvements Still Needed.'
According to Flynn, her office has conducted 18 previous audits with 82 recommendations for improvements related to Metro's contract management practices.
Metro is the elected regional government representing the urbanized portions of Multnomah, Clackamas and Washington counties. Among other things, it is responsible for regional planning, solid waste disposal and the management of such visitor facilities as the Oregon Zoo.
According to the audit, contracts play an important role in Metro's ability to provide such services. During the past five fiscal years, Metro issued more than 3,300 contracts worth a total of $485 million, seven of which were worth $234 million. Most contracts valued at more than $5 million were for Metro's solid waste, performance and entertainment and consumer and trade show services.
Wednesday's audit focused on three large contracts worth $130 million. One involved beverage services at visitor facilities. Two related to the solid waste transfer stations operated by Metro. The audit found deficiencies in the administration of all three contracts.
'Of the three contracts we examined, we found they operated as intended in some areas, but improvements were needed in others,' the audit reads. 'At the visitor facilities, the quality of catering was high, but operations at concession stands may not have met the quality expected by Metro. At the transfer stations, we found material recovery operations appeared to be sound. However, our analysis found contractors did not meet contract requirements for staffing the facilities. Further, after reviewing maintenance at the transfer and visitor facilities, we found Metro could improve its processes to ensure assets were properly accounted for and controlled.'
Among other things, the audit found Metro failed to recover approximately $28,000 as the result of accidents at the transfer stations because employees did not properly follow up after being notified of them.
The audit made the following recommendations to improve contract management:
• Consistently apply policies for identifying and managing high-risk contracts.
• Improve contract administration plans by: developing procedures for how compliance with high-risk contract requirements will be documented; developing procedures for how contract requirements will be monitored, and by whom; determining contractor-generated reports that will be required for monitoring purposes; and developing procedures stating when action will be taken in response to poor performance, and by whom.
• Clearly assign roles, responsibility and authority for contract monitoring and enforcement.
• Ensure Metro-owned inventory is properly accounted for.
• Verify contractors have an adequate system to control for proper use, maintenance and reporting of property.
• Ensure Metro collects money it is owed for liability claims.
In a written response, Metro administrators involved with the contracts thanked Flynn for the audit and said steps were already being taken to address the findings and recommendations.