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Fayetteville audit committee flags recordkeeping gaps in GovDeals auctions, weighs tighter employee bidding rules
Summary
The committee's internal auditor reported strong segregation-of-duties controls in surplus-property auctions but found inconsistent retention of key documents and recommended consolidating three disposal policies; members discussed fraud risks and whether GovDeals can provide bidder lists to spot employee-related bids.
Aaron, the city's lead internal auditor, told the Fayetteville City Audit Committee that the city has run surplus-property auctions on the GovDeals platform since about 2010 and that the program has generated roughly $9 million in proceeds overall. "Since then, we've generated $9,000,000 in, extra funds for that," Aaron said, adding that 62 auctions in 2023 alone produced about $998,000.
Aaron said purchasing's procedures include segregation of duties—one person creates an auction, another reviews it and a third approves and publishes it—and he found no issues in how auctions are approved. "So there's not just 1 person handling every aspect of it," he said. His review, however, identified gaps in which documents are consistently retained in auction files.
During discussion, Aaron described the records purchasing staff currently keep: screenshots of the live listing, GovDeals seller certificates and payment confirmations, item photos, inspection forms started in Laserfiche, bills of sale signed when buyers pick up items and, for vehicles, completed title copies and FedEx tracking receipts. He recommended reviewing and consolidating three overlapping policies that govern disposals (fixed-assets, vehicle sales and auction procedures) so retention expectations are clear.
Committee members raised fraud-risk concerns about employees or relatives bidding on city items. One member said the current policy forbids city employees from bidding and proposed changing the wording to prohibit employees from winning instead of bidding. "Our policy is that a city employee cannot bid, but we're proposing to change that policies to they cannot win," the member said. Aaron said he favors revising verbiage and pursuing practical checks, including asking GovDeals whether it can produce bid lists that the city could cross-reference with employee records.
The committee agreed to follow up with purchasing staff and to contact GovDeals about whether bidder information can be provided for periodic review. No formal policy change was adopted at the meeting; members asked staff to draft options for tightening controls and clarifying retention requirements.
Next steps: staff will explore whether GovDeals will provide bidder lists and will work with the incoming purchasing director to consolidate disposal policies and update record-retention language.
