The audit of Facilities Management Contract Administration was conducted to evaluate controls over contract administration, including cost-effectiveness and compliance.
The Facilities Management department provides on-demand and preventive maintenance services and life-cycle equipment replacements for the City’s facilities. This audit focused on Facilities Management’s use of contractors to provide certain services, including custodial and specialized services. Out of the department’s approximately $20 million annual budget, about $3.3 million is allocated to these contracted services.
The audit found that Facilities Management had not ensured that payments matched the contracted prices and, as a result, overpaid one contractor by about $164,000 from July 2017 through November 2019. Further, for 13 contracted repair or maintenance projects tested, only 3 pricing quotes were retained. Quotes document the agreed-upon cost and the specific work to be performed for an individual project. As an underlying cause, Facilities Management had no written policies and procedures and provided only limited guidance and training for its contract administrators.
Contractor performance was not effectively monitored and performance problems effectively addressed. From July 2017 through October 2019, 73 work orders documented custodial services performance concerns at 14 different City facilities. A custodial services audit performed in 2010 identified similar performance problems and made recommendations to better monitor contractors’ performance. While Facilities Management began implementing some changes, these new efforts were not formalized into policies and procedures and did not remain operational.
Facilities Management contract administrators did not consistently maintain documents necessary for effective contract management, such as copies of the signed contract, contract extensions and pricing changes, change orders, project scopes of work/quotes, and warranties. Further, management had reviewed project files for only 38% of the projects completed between July 1, 2017 and October 21, 2019. Finally, Facilities Management also did not have established policies, procedures and consistent documentation for its project prioritization, planning and scheduling.
The department agreed with the audit recommendations.