Report 2011-131 Recommendation 36 Responses

Report 2011-131: City of Vernon: Although Reform Is Ongoing, Past Poor Decision Making Threatens Its Financial Stability (Release Date: June 2012)

Recommendation #36 To: Vernon, City of

If the city plans to continue to rely on the advice of its consultants when entering significant energy-related transactions, it should develop a process for the consultants to provide written documentation that would enable the city to satisfy the process and guidelines outlined in the previous two recommendations.

Annual Follow-Up Agency Response From July 2014

The City has incorporated as standard language in its form contracts an Ownership of Work clause that requires all contract-related written and electronic documentation prepared by the contractor to be provided to the City whenever requested. In pertinent part, the Ownership of Work clause states that all reports, drawings, plans, specifications, computer tapes, floppy disks and printouts, studies, memoranda, computation sheets and other documents prepared by Contractor in furtherance of the work shall be the sole property of City and shall be delivered to City whenever requested. Contractor shall keep such documents and materials on file and available for audit by the City for at least three (3) years after completion or earlier termination of this Contract A copy of related sample documentation from Crossborder Energy is included.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

On February 25, 2013, the City Council adopted Resolution No. 2013-23, approving the general forms of personal service contract, types of insurance and indemnity, purchase order contracts, requests for proposals, and attorney services contracts. All of these forms of document contain the recommended good governance provisions, including well-defined scopes of work and deliverables. Requests for Proposals are required to contain well-defined scopes of work and deliverables prior to City Attorney approval as to form and City Administrator approval to issue. The appropriate form of contract is attached as an exhibit to the RFP and, ultimately, the RFP and selected proposal are attached in their entirety as exhibits to the final contract. The City has restructured most of its contracts with energy related consultants and the Finance Director now requires consultants to provide, as appropriate, written documentation and spreadsheet models to enable updates to be performed by staff in order to reduce reliance on consultants.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although the city states it has restructured most of its contracts with energy related consultants and the finance director now requires consultants to provide, as appropriate, written documentation and spreadsheet models to enable updates performed by staff in order to reduce reliance on consultants, it has not provided us with supporting documentation of this newly established process. The city provided an example of a contract with a financial advisor but this is not an energy consultant.

6-Month Agency Response

The city indicates that in a February 2013 city council meeting, the city attorney was to present to the city council for approval contract forms required under the new competitive bidding and purchasing ordinance for all city procurements, which will include respective provisions as required by city policy and applicable law. The city also states that it will require consultants to provide written documentation and spreadsheet models, as appropriate, to allow city staff to update the information and reduce reliance on consultants.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The city did not address this recommendation in its August 2012 response. (See 2013-406, p. 197)

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2011-131

Agency responses received after June 2013 are posted verbatim.