Audit Report on the Administration for Children’s Services’ Vendor Performance Evaluations

Executive Summary

The Administration for Children’s Services (ACS) is responsible for providing child welfare, juvenile justice, and early care and education services to New York City’s children and their families. ACS contracts with vendors to provide goods and services on its behalf and to support its operations and, in doing so, is required to follow the Procurement Policy Board (PPB) Rules.

Section 4-01(b) of the PPB Rules states,

A performance evaluation shall be done no less than once annually except that for procurements of goods by competitive sealed bid other than sealed bids awarded based on best value and procurements below the small purchase limits, an evaluation report shall be prepared only in cases of deficient performance.

Further, the PPB Rules do not apply to certain procurements as specified in §1-02(d) and certain transactions specified in §1-02(f), “provided [in the latter case] the ACCO determines that the process to be followed is in the best interest of the City and states the basis therefor.” The transactions specified in §1‑02(f) include government-to-government contracts, the provision of work or services by State-regulated public utilities, State- or federally-regulated cable television and other public services, professional memberships, and subscriptions.

The Mayor’s Office of Contract Services (MOCS) facilitates and oversees citywide procurement activities. The Director of MOCS is the City Chief Procurement Officer (CCPO) and is responsible for coordinating and overseeing the procurement activity of Mayoral agency staff. Within each Mayoral agency, the Agency Chief Contracting Officer (ACCO) is responsible for organizing and supervising the procurement activity of subordinate agency staff in conjunction with the CCPO.

In 2017, MOCS launched the Procurement and Sourcing Solutions Portal (PASSPort), an online portal, to facilitate the City’s procurement process and allow agencies to document and monitor vendor performance evaluations (PEs) in one centralized system. The PASSPort Performance Evaluations for Agencies user manual states that “PASSPort will create a draft PE for the contract 12 months after the contract start date.”

During Fiscal Year 2018, ACS was responsible for evaluating vendors’ performance for 493 contracts that were registered with the Comptroller’s Office, with a combined maximum value of $5.3 billion.

Audit Findings

ACS generally did not annually evaluate and document vendor performance in accordance with the PPB Rules. Based on our review of the above-mentioned 493 contracts, ACS did not complete PEs for 78 contracts (15.82 percent), and did not complete PEs timely for 415 contracts (84.18 percent).

ACS failed to evaluate vendors’ performance for contracts at all or timely because it did not ensure that PEs were in fact created on contract anniversary dates, improperly requested PE exemptions for contracts, did not adequately monitor staff to ensure they completed PEs, and did not establish adequate policies and procedures for PEs.

Audit Recommendations

Based on our findings, we made the following five recommendations to ACS:

 ACS should ensure that PEs are completed and finalized within 90 days of the contract anniversary date;

• ACS should review PASSPort data to ensure that PASSPort creates PEs for all contracts except for procurements of goods by competitive sealed bid other than sealed bids awarded based on best value and procurements below the small purchase limits;
• ACS should request exemptions only for contracts that meet the PPB Rules’ PE exemption criteria;
• ACS should ensure that the ACCO and ACCO staff monitor PE completion status on an ongoing basis and periodically send written reminders to staff to complete PEs before their due dates; and
• ACS should develop formal written policies and procedures, communicate them to staff, and train staff on their responsibilities for completing PEs including, but not limited to, monitoring and follow-up activities.

Agency Response

In its response, ACS stated that it “consistently follows the relevant Procurement Policy Board (PPB) Rules and completes Performance Evaluations annually, as required.” Further, ACS stated that it “has carefully reviewed and taken into consideration the [audit report’s] five recommendations.” ACS stated it implemented or will implement two recommendations and disagreed with three recommendations.