Audit action is next task for council Report recommends steps to save money, tighten practices

'Do something with it'

How, when proposals will be implemented remains uncertain

December 14, 1997|By Dana Hedgpeth | Dana Hedgpeth,SUN STAFF

The Columbia Council faces the task of turning the ideas of a 27-page audit into a reality that will change the way the Columbia Association does business.

"We paid $50,000 for this [audit]; now we should do something with it," said Columbia Council member Cecilia Januszkiewicz of Long Reach village, one of the members who ordered the three-month audit of the association by Raffa & Associates P.C.

Released last week, it confirms many of the findings of an investigation published by The Sun in April.

In its report, the Washington accounting firm recommends new policies designed to save money and avoid the appearance of favoritism, including establishing a purchasing agent position, instituting a more formal bidding process for projects costing more than than $10,000 and defining purchasing policies more clearly.

How and when the Columbia Council -- made up of elected residents from Columbia's 10 villages -- will implement the proposals remains uncertain.

In the planned community, the Columbia Association runs everything from day-care programs to 3,000 acres of parkland. Its $49 million budget makes it one of the largest homeowner associations in the nation.

One of the first steps by the council might be to hire an independent purchasing consultant to help the board decide which recommendations are appropriate and how they should be put into effect, said Alex Hekimian, chairman of the council's seven-member purchasing task force.

Council member Charles Rees of Kings Contrivance said of the audit, "They gave us the advice on getting a purchasing agent, training more staff so they understand the policies and changing the way we do some bids, but they didn't give us the nuts and bolts of how to do it all."

The purchasing task force will meet in January to review in detail the auditors' recommendations, which come as the Columbia Association begins a nationwide search to replace Padraic M. Kennedy, its longtime president, who will retire in the summer.

'A fresh start'

Some board members say that because they are hiring a new leader, it is an ideal time to implement new purchasing policies.

"We get off to a fresh start with new practices that are stronger and a new chief executive officer," Hekimian said. "It creates an opportunity for a new, fresh way of thinking. This is a new direction in the way CA does business."

At a news conference Friday that focused on the audit, Kennedy reaffirmed that his staff members have always worked to get the best deal for the association.

"The staff has sought the best prices, gotten the best prices," Kennedy said. "The main thrust of the audit showed that in documenting purchases and filling out paperwork, there was a major weakness."

Frank Banda of Raffa & Associates, who led the audit, said that because of the association's quasi-governmental nature, it needs to implement clearly defined practices.

"They receive assessments, and the way they approach their [purchasing] policies has really got to go beyond reproach," Banda said.

The Sun articles prompted concern among the elected board members, many of whom compared the problems to a company's growing too big too fast.

Tightened management

Since the audit began, some council members -- criticizing past councils and CA staff members as too complacent about purchasing procedures -- have vowed to play a more significant role in management of the association.

Association spending policies are similar to those of some governments and large businesses. But The Sun found that the CA has fallen short of accepted purchasing standards by accepting late bids, altering bids after they arrived and allowing contractors to change projects without written authorization.

In recent months, CA staff members -- while playing down the newspaper articles and the significance of the audit -- have tightened spending practices.

The auditors recommended that the CA:

Use purchasing cards -- similar to credit cards -- for purchases of less than $1,500.

Use more blanket purchase orders for such repeat purchases as office supplies.

Require sealed bids for purchases exceeding $10,000. Strict deadlines should be set, and no late bids should be accepted.

Conduct periodic internal reviews of its purchasing operation.

Require bids for professional services. In the past, staff committees selected services based on one quotation.

To some council members, the difficulty will be deciding which of the proposals to implement first.

Documents vs. best price

"We have to get beyond matters of formality, like getting better documentation, and move into the real substance [of this audit], like getting the best price," Rees said.

Hekimian said there are more important issues than price.

"The whole tone of the organization has to change, from trying to save money no matter what rules they have to break, to being fair, honest and aboveboard," he said.

The audit found no evidence of corruption but said certain bids raised the appearance of favoritism. The report pointed out that for a rock-climbing wall project this year, an unidentified vendor served as a consultant for the design of the wall and then successfully bid on the $23,500 project.

Some are concerned that the council not rush into implementation of the auditors' recommendations without fully analyzing how the new procedures would work.

"I hope we're not putting ourselves in a straitjacket where we blindly do things," said Columbia Council member S. Kenneth Puckett of Dorsey's Search.

Pub Date: 12/14/97

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