Medford Township Professional and Other Services Review Task Force

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Medford Township Professional and Other Services
Review Task Force
COUNCIL PRESENTATION August 1, 2012
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AGENDA

• Background
• Work Performed
• Conclusions
• Examples
• Recommendations

7/17/12
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BACKGROUND - TASK FORCE

• Established by Medford Township Council
  Resolution 36-2012 on February 21, 2012.
• Scope expanded by Township Council Resolution
  77-2012 on May 10, 2012

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OBJECTIVES TASK FORCE

• Review professional services and other contracts
  from 2006-2011
• Audits and financial documents
• Interviews
• Make recommendations to Township Council

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MEMBERS TASK FORCE

• Chris Buoni, Councilman
• Frank Czekay, Deputy Mayor
• Jack Hartwig
• Bill Schade

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RECOMMENDATIONS TASK FORCE
Internal control improvements Referrals to other
agencies Other actions to vindicate the rights of
Medford Township
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WORK PERFORMED TASK FORCE

• Reviewed selected township records
• Bid documents and contracts
• Purchase orders
• Vendor invoices
• Capital requests and expenditures
• Audit reports
• Other

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WORK PERFORMED TASK FORCE

• Interviews
• Current and former township employees
• Professional service and other contractors
• Limitation
• Refusal of certain former elected officials and
  contractors
• Interviewee time limits

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RESULTS TASK FORCE

• Conclusions
• Total collapse of township contracting internal
  controls
• Little or no effective oversight of professional
  and other contractors
• Ineffective township policies and procedures
• Disregard for contracting laws and regulations by
  township leadership

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Excerpt from bid specs actual bid results

• DESCRIPTION OF WORK
• The work includes the furnishing of all labor,
  materials and equipment necessary or required to
  complete all work set forth in these
  specifications. The contract is for Public
  Properties Maintenance and Repairs during the 12
  months following contract execution. This
  contract is for the purpose but not limited to
  the following types of work site clearing, tree
  removal, excavating, brush removal, storm basin
  repair, storm pipe repair, athletic field
  maintenance, grading, stump removal/grinding,
  concrete work, road repairs, manhole/catch basin
  repairs, demolition services, high angle bulb
  replacement, and project deemed necessary but not
  listed above by the Township Public Works
  Department.

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Excerpts from Vendor Invoice
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Excerpts from Vendor Invoice
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Excerpts from Vendor Invoice
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Excerpt from bid specs actual bid results

• DESCRIPTION OF WORK
• The work includes the furnishing of all labor,
  materials and equipment necessary or required to
  complete all work set forth in these
  specifications. The contract is for Public
  Properties Maintenance and Repairs during the 12
  months following contract execution. This
  contract is for the purpose but not limited to
  the following types of work site clearing, tree
  removal, excavating, brush removal, storm basin
  repair, storm pipe repair, athletic field
  maintenance, grading, stump removal/grinding,
  concrete work, road repairs, manhole/catch basin
  repairs, demolition services, high angle bulb
  replacement, and project deemed necessary but not
  listed above by the Township Public Works
  Department.

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Excerpts from Vendor Invoice
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Excerpts from Vendor Invoice
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Excerpts from Vendor Invoice
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Engineers Estimate
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Actual Billing from Vendor
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Summary of this job
Engineers Estimate 88,210.00 Vendor Invoice
1 - 90,722.50 Vendor Invoice 2 -
4,767.12 Vendor Invoice 3 - 36,892.27 Tota
l Vendor Billing 132,381.89 Over
By 44,171.89
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Engineers Estimate
PROJECT TOTAL 182,500.00
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Actual Bill 3 Invoices from Vendor
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Summary of this job
Engineers Estimate 182,500.00 Vendor Invoice
1 - 214,400.00 Vendor Invoice 2 -
5,000.00 Vendor Invoice 3 - 150,000.00 Total
Vendor Billing 369,400.00 Over
By 186,900.00
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Excerpt from Award Bid
MILLING ASPHALT

Project Area/Job 1,500 square yards _at_
3.32/sq.yd. 4,980
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Excerpt from Vendor Invoice
7/17/12
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No bid contracts
7/17/12
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STATE LAWS bidding
7/17/12
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No bid contract
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No bid contracts
7/17/12
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No bid contracts
7/17/12
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No bid contracts
7/17/12
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INAPPROPRIATE PRICING
7/17/12
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INAPPROPRIATE PRICING
7/17/12
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DGA
7/17/12
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DGA
Total 181,751.90
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DGA
Total 11,920.00
7/17/12
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DGA
Total 168,209.85
7/17/12
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Taunton Fire House
7/17/12
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Taunton Fire House
7/17/12
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Taunton Fire House
7/17/12
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Taunton Fire House
7/17/12
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Taxpayer cost - 75,825.00
7/17/12
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Taxpayer cost - 9,796.50
7/17/12
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Taxpayer cost - 24,990.00
7/17/12
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RECOMMENDATIONS

• Council should take necessary steps to
• Reform township purchasing to comply with
  effective financial controls
• Restore integrity to township purchasing and
  contracting

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RECOMMENDATIONS

• Instruct Township Manager to implement effective
  purchasing policies and procedures for the
  township, including
• Effective purchasing oversight
• Compliance with laws and regulations
• Recommend any necessary ordinances
• Report progress to Council

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RECOMMENDATIONS

• Procedures should include establishing an
  effective purchase order system to control
  township expenditures
• Professional service contractors should supply
  estimates for assignments
• Township payments limited to purchase order
  unless order amended

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RECOMMENDATIONS

• Contracts to require contractors and
  professionals to adopt township invoice
  requirements
• Detailed explanation of charges with sufficient
  detail for an appropriate payment decision
• No deviation from contract bid specifications
• Professional service contractors accept fiduciary
  responsibility to township

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RECOMMENDATIONS

• Establish a Responsible Township Official for
  all contracts
• Township Manager or his designee
• Included on all contracts and awards
• Responsible for contract oversight
• Insure purchase in accordance with contract
  provisions
• Approve contract payments
• Annual compliance testing by Township Auditor

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RECOMMENDATIONS

• Establish procedures and any necessary
  implementing ordinance to enable township CFO to
  obtain independent legal opinion concerning
  payment authorization, independent of Township
  Solicitor
• Notification to Manager and Mayor

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RECOMMENDATIONS

• Council to implement necessary ordinances
• Restore township financial and contracting
  integrity
• Insure peace and good order in township
  expenditures

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RECOMMENDATIONS

• Amend Medford Township Municipal Code Chapter 5,
  Article VII, Section 5-52
• Add section requiring Township CFO to report to
  Council on a yearly basis actual expenditures
  under Capital Expenditure Program

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RECOMMENDATIONS

• Amend Medford Township Municipal Code Chapter 5,
  Article VII, Section 5-56 procedures to add
• Yearly reporting by Township Manager or designee
  concerning the examination of requisitions and
  purchasing

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RECOMMENDATIONS

• Amend the Township of Medford Municipal Code
  Chapter 111, Peace and Good Order to add the
  following prohibited acts
• Improper payment submission by contractors
• Improper vendor oversight by township employees
• Improper actions by elected officials
• Improper actions by appointed officials

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RECOMMENDATIONS
Create necessary ordinances, resolutions and
procedures to allow the Township to debar,
suspend or disqualify vendors and persons from
participating in Medford Township contracts.
  Commission of a criminal offense incident to
obtaining a contract   Violations of Township
Pay to Play ordinance   Failure to perform in
accordance with contract specifications or
perform in a satisfactory manner.  
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RECOMMENDATIONS

• Against Peace and Good Order for contractors to
  make improper payment submission
• Willful submission of documents to the township
  that are not true with respect to every material
  fact
• Willful agreement to collude or otherwise take
  action to restrain fair and free bidding
• Willful submission of a claim not in accordance
  with contract bid specifications

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RECOMMENDATIONS

• Against the Peace and Good Order for a township
  employee to cause inappropriate payments
• Willful agreement to collude or otherwise take
  action to restrain fair and free bidding
• Willful certification or cause the certification
  of a township voucher for payment without
  knowledge of the facts or without reasonable
  procedures that materials and supplies have been
  received

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RECOMMENDATIONS

• Against the Peace and Good Order for an elected
  or appointed officials of Medford to cause
  inappropriate payments
• Willful interference with a township employee
  implementing reasonable procedures to approve
  vouchers for payment
• Willfully causing a township employee to pay a
  voucher that would not otherwise be approved
• Willfully and inappropriately cause a township
  employee to select a vendor that would not
  otherwise be retained

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RECOMMENDATIONS

• Council should authorize the Review Task Force,
  in coordination with the Medford Township Chief
  of Police, to refer certain information to
  appropriate criminal justice authorities
• Investigation not a task force function
• Decision by competent authorities

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RECOMMENDATIONS

• Township should obtain proposals from law firms
  concerning legal action to explore the
  possibility to recover funds and vindicate
  Medford Township
• Understand litigation risks
• Understand litigation cost
• Understand litigation recovery potential

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TASK FORCE
Council Discussion Public comments Final
statements