Letter Report on the Purchasing Practices of the Independent Budget Office

Executive Summary

This Letter Report concerns the New York City (City) Comptroller’s audit of the purchasing practices of the Independent Budget Office (IBO). The objective of the audit was to determine whether IBO maintained adequate financial controls over its purchasing practices that involve Other Than Personal Services (OTPS) expenditures as required by the City Comptroller’s Directives, IBO’s policies and procedures, and applicable Procurement Policy Board (PPB) Rules.

IBO is a publicly funded City agency dedicated to enhancing the understanding of New York City’s budget by providing nonpartisan budgetary, economic, and policy analysis in the form of reports and fiscal briefs for elected officials and the residents of the City. Its primary responsibility is to provide nonpartisan information about the City budget and tax revenues, including information on topics ranging from individual agencies’ spending to program costs, historical trends, tax burdens, debt and capital finances.

IBO also testifies at public hearings and makes presentations to City Council committees, individual members of the City Council, Borough Presidents and other elected officials and their staffs, as well as to community boards, civic groups, and other organizations. In addition, IBO responds to requests for information and analysis related to the City budget.

In the Comptroller’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2020, IBO reported OTPS expenditures totaling $776,086.

Results

Our audit found that IBO generally, with limited exceptions, maintained adequate financial controls over its purchasing practices involving OTPS expenditures. Specifically, IBO maintained and implemented proper policies and procedures in its procurement practices, including proper approval and documentation of purchases. However, our audit found two areas in which IBO’s practices did not comply with applicable Comptroller’s directives – inadequate segregation of duties involving certain procurement card transactions, and unallowable expenditures of City funds for meals at monthly staff meetings.

Recommendations

Based on the audit, we make the following two recommendations that the IBO should:

1. Designate another IBO official (e.g., the Director) to authorize and approve the Chief of Staff’s procurement card transactions.
2. Follow Comptroller’s Directive #6 regarding the use of City funds for meals and refreshments.

Agency Response

In its response, IBO agreed with the first recommendation and stated, “we will make changes to our practices accordingly”. Additionally, IBO said it will discontinue use of City funds for monthly staff meetings.