Policy aims to end errors
Overpayment for truck spurs rule change
By Bert Lehman
A new procurement policy that will help track city purchases has been approved by the Clintonville City Council.
The council approved the policy at its April 10 meeting.
The Clintonville Finance Committee addressed the policy at its April 9 meeting. Prior to discussing the proposed new policy, the committee first discussed how the city overpaid for a plow truck in 2015 by $60,000.
“I’m trying to figure out how we made such a large overpayment,” Supanich told the committee.
He said he wanted to make sure the city didn’t make that type of mistake again.
“If we’re trying to maintain a reasonable budget we really need to understand how that happens so it doesn’t happen again,” Supanich said.
Clintonville City Administrator Sharon Eveland said she and Public Works Director Kray Brown have researched what happened, since neither of them was with the city at the time of the error. What they found she said was the original contract with Packer City was for a plow truck and additional accessories to go on the truck. But the accessories were actually purchased from a different company.
“The original quote/contract with Packer City was never updated or corrected to reflect that that was actually purchased from somewhere else,” Eveland said. “So they made a deposit on the original purchase and when the vehicle itself was delivered they paid the remainder that was due, which included the cost of that equipment.”
She added, “In hindsight, it should have been caught and addressed when the other purchase was made from the other company.”
Eveland told the committee she is proposing a new procurement policy for the city that should help eliminate such mistakes. The new procurement policy would require the issuance of purchase orders and the use of a tracking system.
“This is something that finance [committee] had talked about before and pushed for also,” committee member Mike Hankins said.
Regarding the overpayment for the plow truck, Clintonville Clerk/Treasurer Peggy Johnson said originally the wrong amount was budgeted. The next year when the second payment was due, the details for that payment were missing.
“Budget-wise, when we went to look it up in the book, it wasn’t budgeted correctly,” Johnson said. “So right there your tracking is gone.”
Johnson added that tracking purchases has been difficult with the number of unbudgeted purchases that have been made by the city over the last few years.
New procurement policy
Later during the committee meeting, Eveland presented the proposed new procurement policy.
She said the proposed policy adds to the city’s existing procurement policy, which she described as a “basic” policy. The proposed policy sets up procedures that use purchase orders, what type of purchases would require a purchase order, how purchase orders would be processed and specified when and what type of approval would be required.
“This is going to require some work on everyone’s part,” Eveland said. “It’s going to mean an adjustment period.”
She added that the proposed policy will make it easier to track city purchases.
Hankins asked what some of the differences are in the proposed policy when compared to the city’s current procurement policy.
Eveland said the city’s current policy allowed anyone in a department to make a purchase of any amount as long as the item was in the city’s budget.
The proposed policy requires a purchase order to be generated and signed by city personnel with the required authority. A department head could approve a purchase up to $5,000. A purchase of $5,000 to $35,000 would require approval from a department head as well as the city administrator. Any purchase over $35,000 would also require approval from the respective city committee.
“That’s one of the big things that is different,” Eveland said. “It’s not going to go all the way to council. What this is, for very large purchases it gives a second eye outside of [city] staff. This is one of the things that might help with preventing potentially another overpayment like with what we had with the snowplow.”
The new policy would also require any purchase of an item that is not in the budget to have a purchase order generated and approval from the city council.
Eveland said the proposed policy also addresses unauthorized purchases. If an unauthorized purchase is made by a city employee it will be considered a personal purchase and the employee making the purchase may be liable for payment.
Eveland informed the council that Keith Steckbauer, the city attorney for Clintonville, has reviewed the proposed procurement policy and approves of it.
The proposed policy also states it is the preference of the city to purchase items locally, but there is no mandate.
“At the same time, we have to be fiscally responsible and be aware that we shouldn’t be spending a lot more money to purchase local,” Eveland said. “I think if you put a specific dollar or percentage on there then I think sometimes that can really tie your hands.”
The proposed procurement policy also allows the city administrator to approve unbudgeted purchases that are under $2,500.
The committee recommended approval of the procurement policy. The city council approved the policy the next night at the city council meeting.