The County of Orange spends $3 billion every year buying goods and services – from toilet paper to real estate to mental health care, and everything in between – but the purchases remain disorganized and costly for taxpayers, according to a grand jury report released Thursday.
More troubling, the grand jury found, is county officials have been repeatedly advised of the shortcomings and are in denial that a problem exists.
“Many employees assigned to procurement tasks – at any level – lack job-related training, education or experience,” said the report, titled “Procurement: Big Budget, Low Priority.” “Procurement functions are spread across all 26 county agencies when management by a single agency could achieve cost savings and improve performance, consistency and accountability.”
Well-run purchasing can save governments millions each year, the grand jury said.
The county has 240 certified “deputy procurement agents” with 40 different job titles managing 3,463 contracts spread across those 26 different agencies, the report says.
“The Grand Jury is concerned that having this many high-value contracts spread out across the county system likely handicaps effective oversight and coordinated management,” it said.
The county said it respects the work of the grand jury and will be evaluating the recommendations and findings. It has 90 days to respond.
Faced with similar criticism in the past, the county has said that centralization was unwarranted, and that many of the ideas require further study.
The decentralization of purchasing was fallout from the county’s bankruptcy in 1994, when many jobs were slashed. It has never been fixed, the grand jury said.
Since 1998, several grand juries, internal audits and outside consultants have concluded that the county’s purchasing structure and function is flawed. Still, the latest report says: “Recommendations for improvement have gone largely unheeded while County Procurement has fallen behind industry best practices.”
Officials only review 5.8 percent of contracts a year to ensure that terms are being met, which is “inadequate for dependable evaluation,” the grand jury warned.
The report also says the county failed to:
• Actively recruit a procurement professional for the job of “County Purchasing Agent,” instead transferring an existing manager into the position without recruitment or testing.
• Place all purchasing responsibility under a single agency “to promote improved performance and cost savings.”
• Offer “competitive compensation” to employees charged with purchasing. Other large counties – Riverside, San Diego, San Bernardino and Santa Clara – have centralized, professional purchasing departments and pay their key managers more.
“Expenditures of $3 billion require strong professional leadership and effective management,” the grand jury said.
July 1, 2016
The Orange County Register
By Teri Sforza
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