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Dallas procurement review finds contract irregularities; $3.8 million in retroactive payments raised to committee
Summary
Procurement staff told the committee they found multiple instances where services were procured outside standard procedures and requested retroactive ratification for payments dating to 2023; procurement said it has imposed temporary controls and is retraining and disciplining staff.
Council members told procurement leaders they were alarmed on June 10 after staff disclosed they had identified multiple instances of services procured or paid outside established contracting procedures, including about $3.8 million spent between January 2023 and September 2024 that the city is asking committees to ratify retroactively.
Juanita Ortiz, director of the Office of Procurement Services, said the department’s recent process review turned up services received under terminated term contracts or under agreements that lacked required provisions. Ortiz said staff at the time proceeded to accept services and pay vendors, but the correct process would have been to bring ratifications to council in advance.
“We received services from the vendors through either term contracts that were already terminated or contracts that were valid but did not include certain provisions,” Ortiz said. She said, as part of process improvements, procurement temporarily restricted entering ratification transactions into the enterprise system and is working with a consultant to update policies and procedures.
Assistant City Manager Donzel Gibson told the committee the findings emerged from an internal audit-style review procurement is performing and that the city had paid vendors when services were rendered. Gibson said leadership at the time should have brought these items before council; the city is now self-reporting the exceptions and has begun taking corrective steps.
When asked whether staff had taken disciplinary action, Gibson said the city had taken disciplinary measures and was retraining employees and revising procedures. Several council members described the amount and the age of the payments as “egregious,” and requested additional follow-up and stronger internal controls.
Committee members asked for specifics about the items and for procurement to provide documentation; procurement staff indicated they would provide supporting materials and that the ratification memos will be brought to council for formal action.
