Audit Report on the Procurement Practices of the New York City Law Department

AUDIT REPORT IN BRIEF

This audit determined whether the New York City Law Department (Department) procures Other Than Personal Services (OTPS) in accordance with applicable procurement procedures, including the City’s Procurement Policy Board (PPB) rules, Comptroller’s directives, and its own formal procedures. The scope period of this audit was Fiscal Year 2005. The Department is the attorney for the City, City agencies, and certain non-City agencies and pension boards. The Department is in charge of litigation and other legal matters involving the City and its interests. During Fiscal Year 2005, the Department’s budget was approximately $111 million, consisting of $82 million for Personal Service expenditures and $29 million for OTPS expenditures.

Audit Findings and Conclusions

The Department generally complied with applicable procurement procedures, including the PPB rules and Comptroller’s directives. For our sampled payments: items purchased were necessary for the Department’s office operations; vouchers and corresponding purchase documents were properly approved; amounts paid to vendors were accurately calculated; sales taxes were properly excluded; appropriate documentation to support payment was maintained in the Department files; and voucher packages were stamped “vouchered.”

However, there were some weaknesses in the procurement process that should be addressed: the use of split purchases to circumvent procurement policies, starting contracts prior to their being registered by the Comptroller’s Office, and the lack of in-house written procurement policies and procedures. In addition, the Department’s inventory controls should be strengthened.

Audit Recommendations

Based on our findings, we make four recommendations listed below. The Department should:

• Ensure that all applicable PPB rules and Comptroller’s Directive #24 are followed when procuring goods and services, especially with regard to negotiated acquisitions and the prohibition of split purchases.

• Ensure that all contracts are registered by the Comptroller’s Office prior to the contract’s effective start date.

• Develop a comprehensive policies and procedures manual that addresses all internal processes and functions regarding procurement and distribute the manual to appropriate Law Department employees.

• Ensure that complete and accurate inventory records are maintained.

Agency Response

In their response, Department officials generally agreed with the audit’s findings and recommendations.