And yes Virginia, a Purchase order is a binding legal contract. In a well designed procedurement system, something the City of Bay St Louis evidently lacks, it all starts with a “purchase requisition” (requisition for short) and once the applicable legal requirements are checked and met (including checking against the budget), a purchase order is then issued and an encumbrance created.
I mention this because it is clear none of this occurred with the purchase of the new Fire Truck for the Bay St Louis Fire Department, the State Auditor’s office was called in and a controversy created:
Bay Council okays fire truck purchase ~ Cassandra Favre
In order to follow the rules one must first know what the rules are and I’m wondering if there is anyone at City Hall with any sort of meaningful expertise on the proper financial operation of a Mississippi Municipality. I still cringe in horror knowing the City runs Quickbooks as its ERP package. Such is penny wise and pound foolish on so many levels.
Luckily there is no reason to take blind stabs in the dark when it comes to the proper fiscal operation of a Municipal Government since the good folks at Mississippi State University have been kind enough to post their 2013 Municipal Handbook on the internet free of charge for everyone, and by everyone I mean especially those located at City Hall in Bay St Louis. Chapter IX (that’s 9 for those of you that do not do roman numerals) has a great section on Municipal fiscal operations. It is not an exhaustive treatise on the subject but it pairs nicely with the 2010 Municipal Audit and Accounting Guide, which is also available free of charge from the State Auditor’s Website which goes into a bit more depth.
The purchase of a Fire Truck need not be controversial at all. The City Council surely has better things to do than call in Auditor Pickering’s Investigators to make the administration follow proper purchasing procedures, especially since it all could have been avoided had someone at City Hall known what they were doing (and in the area of fiscal administration that person is NOT the City Attorney) or had simply picked up the phone and called OSA Technical Assistance and asked for help.
The bottom line is in order to do things right you gotta know what the right thing is. Based on what I read in Cassandra Favre’s story above the blind are still leading the blind at Bay St Louis City Hall and it is not a simple question of semantics of what to term a purchase order. Those of us that vote and pay taxes here deserve far better.
>>>I still cringe in horror knowing the City runs Quickbooks as its ERP package.<<<
Oh really?
A perfect example of the proper usage of the word indicia.
Doug,
What is an ERP package? It is a sad state of affairs in the Bay St. Louis City Hall right now. Don’t know what it will take to get the attention of the Council who are responsible for the finances of the city and who could make meaningful changes in how things are done. Hoping for a better new year!
ERP stands for “Enterprise Resource Planning” and is business management software. The Wiki entry defines it in a classic sense as ERP is tailor made for manufacturing processes but the concept applies across industries including Governmental Enterprises like the City of Bay St Louis. The google search “municipal erp software” returned hits from three companies with that specialty. [here] [here] and [here] Many years ago when I performed a couple of municipal audits I seem to recall at least one of the Cities used a Mississippi based software company.
It costs more than Quickbooks and requires trained employees to use it.
The problem with having no true back office function is it becomes hard to quantify what an old client of mine termed “leakage” be it by double paying vendors or outright embezzlement like happened back when Eddie Favre was City Clerk and not reconciling the bank but once a year while his payroll clerk embezzled a fair amount of money (and was not caught because the bank was not being balanced).
Thanks, Doug. That was an education. Didn’t know about the payroll clerk. As they say, if we actually knew what was going on in government, we’d be shocked.
Someone has to find out what the Bay did with the money that utility users sent to city hall when they paid their utility bills which included Solid Waste and Waste Water (Utility Authority.) It seems to me that money should be identified, tabulated, and sent directly to those two authorities. There is no reason I can see for the Bay to owe them $410,000. That is the new total from what I am hearing. It doesn’t seen to be a problem in Waveland. They are current with the utility authorities so the system can work.
But something is wrong in the Bay. Wonder if the Bay could arrange to have their users pay directly to Solid Waste like Diamondhead users do?
Not that many years ago BSL had to get legislative dispensation from the annual audit requirement because their books and records were literally unauditable.
Based on my years doing the accounting thing I think it is safe to assume lots of financial skeletons were buried forever because of it.
The current City Clerk is only a half time employee correct?
Correct, and I think he works part time for City Councilwoman Wendy McDonald at the business she runs,
Habitat for Humanity.
I think the problem was and is the City Attorney was asked numerous times on the legality of random purchase orders issued numerous times for same item and he still states there was no statues violated. Very strange “legal guidance “!!!!!
Are you referring to split purchase orders or the fact the City issues multiple POs for the same purchase because they are not tracking their encumbrances?
Solid purchasing procedures are literally posted all over the internet. Here is James Madison University’s for example.