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Audit finds missing proposal documentation, recommends automated contract-expiration alerts and centralized contract storage
Summary
An audit by I. Bailey LLP found lapses in Carson City’s purchasing and contract-management practices, including five professional services contracts lacking required proposal documentation and inconsistent retention of older contract files.
Kathy, an auditor with I. Bailey LLP, presented the Carson City Purchasing and Contract Management Review and told the Audit Committee the engagement identified two findings and one observation and included recommendations to strengthen procurement oversight.
"During our audit, we found 5 contracts that did not include this required documentation," Kathy said, referring to the city policy that requests at least three informal proposals for professional services contracts over $25,000 even though Nevada law exempts professional services from competitive bidding.
The audit’s first finding addressed professional services contracting: while Nevada law exempts professional services from competitive bidding, the city’s policy requires three informal proposals for professional services contracts exceeding $25,000 to promote transparency. The auditors recommended refresher training for departments about proposal requirements, documenting justification when proposals are not feasible, and periodic compliance reviews to ensure consistent application of policy.
The committee questioned whether the three-quote requirement was practical when local markets have few providers. Carol Acres, the city’s contracts and purchasing administrator, explained the tension between state law and the city policy: "Technically, some of the professional services are exempt through NRS as well. But our policy still stated that anything over 25 still had to have the quotes. So we're up we're currently updating our purchasing policy to remove that." She added that professional services typically follow qualification-based selection processes (SOQs) followed by negotiation rather than price bidding.
The second audit finding highlighted contract-expiration tracking. Auditors reported the city maintains a manually updated contract register without automated alerts and recommended configuring Munis or other systems to generate expiration alerts. Kathy said automation or, as an interim step, calendar-based reminders would reduce the risk that renewals or closures are missed.
An observation focused on retention and accessibility of contract documentation: older contract files were not consistently saved to the city’s shared drive or uploaded to Munis. Kathy recommended formalizing a policy requiring departments to store contract documentation in both Munis and a designated shared drive, paired with training and periodic spot checks.
A committee member moved “to approve the report and direct staff to work on the recommendations as discussed.” Another member seconded the motion; committee members voted in favor and the motion passed.
Kathy closed the briefing by thanking city staff and the purchasing administrator; the committee directed staff to implement the recommended training, policy updates, and improvements to contract monitoring.
