COM 0219.000 2008-2010 - Laserfiche WebLink

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Results Significant improvement was noted in procurement practices, contract language, file organization, and program documentation. Procurement and contract documents now more clearly delineate specific commodities, volumes, and requirements for diversion, recycling, and/or reuse. Policies and procedures were implemented for more timely dissemination of and response to external communications, including governmental regulatory notices; more reliable documentation of contract authorizations, amendment requests, and changes; and more consistent review of contractor claims reports and documentation of payment approvals. However, significant deficiencies continue to exist in the following areas: • Risk of abuse or fraud remains high due to continued failure to include or enforce contract provisions and internal controls relating to contractor tonnage claims for commodities being hauled,or diverted. o Disclosure of "related or affiliated party" and "conflict of interest" relationships between contractors and end-market users and/or implementation of mitigating controls are lacking. For commodities such as glass, scrap metal, and mixed recyclables, DEM continues to permit end- market users to substantiate contractor tonnage claims without independent verification, even when the end-market user and the diversion contractor are affiliated entities or the end-market user has a financial relationship with the diversion contractor. In some instances,; DEM permits the diversion contractor to be the end-market user, with no additional controls in place. c Independent verification of contractor claims for diverted commodities is lacking. For commodities such as transfer station hauling, green waste, and glass, no controls are in place to prevent the contractor from weighing and claiming the commodity multiple times. , Risk of liability and financial loss remains high due to the practice of permitting contractors to commence work or deliver services prior to contract execution and/or with accounts receivable outstanding to the County. o 12 of 16 contracts or contract supplements reviewed were signed after their start-dates. o On at least one occasion, contracts were awarded and payments continue to be made to a contractor with past due tipping fees of $90,000 at the time of award, even when contracts provide that "all bidders having an accounts receivable with the County of Hawaii shall be in good standing." •i Risk of mismanagement and financial loss remains high due to insufficient and ineffective program reporting of relevant, timely, and accurate data that would permit proactive management of contractor performance and assessment of departmental controls. While DEM indicates that progress has been made to permit some program reporting using the County's FRESH accounting system. we noted the following continuing inefficiencies: o Program managers do not have direct inquiry access to the FRESH accounting system to track program expenditures, nor are they provided with relevant contract or program expenditure reports on a regular basis. As a result, program managers must track contract expenditures on separate spreadsheet applications outside of the FRESH accounting system. o No reconciliation of data from spreadsheet applications to the FRESH accounting system is conducted to confirm the accuracy of program reports. o No analysis or implementation of improved project/program accounting modules has been conducted by the County. Audits of other County departments have noted similar inefficiencies of redundant data entry into independent systems because the County's FRESH accounting system lacks the capability to provide necessary reports and is not integrated with other available applications.