Mesa places more scrutiny on spending taxpayer dollars - Ahwatukee Foothills News: Money

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Mesa places more scrutiny on spending taxpayer dollars

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Posted: Sunday, May 20, 2012 2:31 pm

Mesa has halted the sometimes murky way it has awarded certain contracts over the decades, involving millions of dollars a year that the City Council had no control over.

An obscure provision in the city’s code gave the staff sole power to authorize some contracts for services that cost $25,000 or more, which the City Council started looking at two years ago.

But it’s taken until now for the council to fix the problem — in part because it didn’t know exactly what the problem was, City Councilman Alex Finter said.

“At the time, the only thing we could agree on was it was tens of millions of reoccurring spending,” he said. “That was the challenge — nobody knew quite what it was.”

About 30 departments had their own accounting systems and procedures that took two years for the audit, finance and enterprise committee to sort through. Finter is the committee’s chairman.

The city eventually estimated about $20 million a year was approved without the council’s OK because of the city’s code. Finter estimates the figure is $60 million when reoccurring spending is included.

“The council never saw it,” Finter said. “The interesting part was the council is held fully accountable to the taxpayer almost on a daily basis, yet there was this huge amount of spending that the council never saw.”

Audits revealed problems in various departments and with certain practices. Issues ranged from petty cash expenditures that weren’t properly documented to temporary workers who made more than permanent staffers despite a requirement they be paid less.

Mesa didn’t find any fraud, Finter said. But the audits showed a need for transparency and consistent policies. Finter said Mesa could potentially save millions of dollars by tracking the money more closely.

The City Council unanimously approved the change in April, and they’ll go into place this September.

The city will now require more documentation on expenses and procurement procedures, which will appear in reports to the council that are online and accessible to the public.

A new computer system will make it easier for budget officials to track spending and find any violations.

“The system will not allow any changes or any deviating from standard procedures. It will flag it early. It will prevent the payment,” Finter said. “That flag will be seen by a lot of different eyes. The council will be aware of it.”

Expenses under the $25,000, which don’t require council approval, will show up in quarterly reports for elected officials to review. Some services are exempt from council approval. The city staff has discretion to choose professionals such as specialized attorneys for complex legal cases, architects or engineers.

One potential downside is that the City Council process will add up to 30 days to approve contracts. Ed Quedens, business services director, said it will take some adjustment to ensure contracts don’t get delayed.

The new spending policy won’t affect the $99 million Chicago Cubs spring training complex that will be under construction this summer, city engineer Beth Huning said. Many of the procurement contracts are already completed. Most construction contracts — which will make up the bulk of the cost — required City Council approval even before the new spending policy.

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