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Internal audit finds procurement largely compliant but recommends streamlining; staff proposes raising manager approval to $250,000
Summary
An internal procurement audit found contracts sampled were in compliance with laws but identified inefficiencies and recommended raising the city manager’s approval authority (audit recommended at least $150,000). Management proposed increasing the limit to $250,000, updating the purchasing manual, and pursuing a systems modernization ahead of further structural changes; the council introduced an ordinance amending purchasing code sections.
The internal audit manager, Tufik Tafshuri, presented a procurement audit that found Carlsbad’s contracting largely complies with laws and policies based on a sampling of roughly two dozen contracts, but identified areas for efficiency gains and stronger performance measures.
Tafshuri said four main findings emerged: sampled contracts met legal requirements; internal controls are effective but sometimes cumbersome; the city’s purchasing framework aligns with comparable jurisdictions; and operations could be more efficient with clearer performance measures and possible structural changes. His primary recommendation was to consider increasing the city manager’s approval authority (the current limit was set at $100,000 in 2008) to at least $150,000 and to update the purchasing manual (last revised in 2016).
In management’s response, Finance Director Zach Korach said staff recommends raising the city manager’s award authority to $250,000 to streamline procurement. Management also proposed code amendments to eliminate redundant council steps (for example, approving plans/specifications twice) and said a core systems modernization project is underway; policy and manual updates would follow implementation of new financial and procurement systems.
Council discussed the tradeoffs of higher approval thresholds and potential centralization versus the existing decentralized model. After discussion, the council moved, seconded and unanimously voted to introduce an ordinance to amend portions of the Carlsbad Municipal Code (Chapter 3.28) related to purchasing, consistent with the audit and management proposals.
Why it matters: Proposed changes could speed procurement, reduce staff time on repetitive agenda actions and shift the threshold at which council approval is required. Raising the city manager’s approval limit and updating procedures will change routine contracting oversight and increase monthly reporting for large purchase orders.
