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New York City Comptroller William C. Thompson, Jr. today issued an audit citing the New York City Council for violating the City Charter, City rules, and its own regulations including spending $1.67 million for printing without entering into formal contracts.

The audit – of Council purchasing from July 1, 2004 to June 30, 2005 – found that the City Council did not comply with the City Charter, Procurement Policy Board (PPB) rules, and Council rules when purchasing member printing services. You can view the audit at www.comptroller.nyc.gov.

“Instead of awarding a printing contract through competition, the Council intentionally split printing orders or made several small purchases for individual members to prevent the total from reaching the $5,000 threshold for competition,” Thompson said.

Overall, auditors found a pattern of non-compliance with a variety of city rules and the Charter. They found that the Council violated the Charter, PPB rules, and Council rules when purchasing printing services; permitted affiliated companies to submit competing bids against each other for the same proposal; violated a Comptroller’s Directive by using miscellaneous vouchers for all Member purchases and “shared” expenditures totaling $3.49 million; violated Council and PPB rules when making Other-Than-Personal-Services expenditures from its Central Office by not obtaining bids on purchases that exceeded $500 (Council rules) and $5,000 (PPB rules); didn’t use requirements contracts in 22 instances when buying various items; and made improper and questionable payments totaling $54,939.

“The City Charter requires that all contracts and agreements be registered with the Comptrollers Office, since the Comptroller is responsible for tracking City expenditures and maintaining a registry of City contracts,” Thompson said. “By not awarding contracts appropriately, the Council was circumventing important internal controls that allow the Comptroller to ensure that all expenditures are properly recorded on the City’s books and records.”

Thompson issued a series of recommendations, asking the Council in part to: immediately discontinue its practice of splitting purchases to circumvent the PPB rules, Council rules and the competitive bidding process; procure services, especially printing services, in accordance with the Charter, PPB rules and Council rules; and determine whether all bidders are independent from each other to ensure that all purchases are made through open competition.

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