Audit Report on the Purchasing and Inventory Practices of The Office of The New York City Public Advocate

AUDIT REPORT IN BRIEF

This audit determined whether the Office of the Public Advocate (PAO) maintains adequate financial controls over purchasing and inventory practices as required by PPB rules and Comptroller’s Directives. The PAO evaluates whether City agencies are responsive to the public; recommends improvements in agency programs and complaint handling procedures; and serves as ombudsman, or go-between, for individuals who have problems obtaining service, assistance, or responses they need from City agencies.

During Fiscal Year 2006, the PAO had total expenditures of $2.9 million, consisting of $2.2 million for Personal Service (PS) and $724,144 for Other Than Personal Service (OTPS) expenditures.¹ For Fiscal Year 2007, the PAO’s adopted expense budget included $2.6 million for PS and $398,611 for OTPS expenditures.

Audit Findings and Conclusions

The PAO has implemented adequate financial controls over many aspects of its purchasing and inventory practices, as required by PPB rules and Comptroller’s Directives, and has taken action to improve compliance with these rules and regulations to address and correct several deficiencies cited in a previous audit.

However, the PAO lacked required competition for four purchases from vendors (each paid in excess of $5,000), inappropriately divided purchase transactions, and lacked documentation to verify and attest to the receipt of goods purchased and paid for. In addition, while all sampled equipment was accounted for, the PAO did not maintain a complete and accurate inventory record of its physical assets inventory.

Audit Recommendations

To address these issues the audit made seven recommendations. Among them, we recommend that the PAO should:

• Ensure that all applicable PPB rules and Comptroller’s Directive #24 are followed when procuring goods and services, especially regarding the solicitation of competitive bids and the prohibition of split purchases for goods or services greater than $5,000.

• Maintain adequate documentation and records to evidence the receipt of purchased goods, including the quantity, condition, date, and name of receiver.

• Ensure that accurate, detailed inventory records are maintained to reflect equipment serial numbers, descriptions, locations, user assignments, and asset identification tag numbers of agency assets. These records should be updated as needed to reflect the acquisition, disposal, reassignment or relocation of assets, and should be reconciled periodically to ensure accuracy and completeness.

PAO Response

The PAO generally agreed with all six recommendations made in this report. The full text of the PAO response is included as an addendum to this report.

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