Town’s Procurement Process Gets Passing Grade

MARKHAM - Markham’s Auditor General presented her first report to Members of Council on the Procurement Process.

The Auditor found compliance with the Town Purchasing By-law and related policies satisfactory, though she offered recommendations to further improve the process, increase transparency and achieve more value for money.

“Overall, the Town is compliant with Purchasing By-laws and policies for large value procurement actions, but departmental purchases need some attention to strengthen compliance and ensure transparency,” concluded Auditor General Ingrid Kutter.

Procurement is the process of obtaining goods and services through contractual agreement. A basic principle of procurement is to maximize competition among potential vendors to get the best value for money.

“Procurement is one of the largest expenditures by the Town,” said Joseph Virgilio, Ward 3 Councillor and Chair of the Finance and Administrative Issues Committee. “Over 800 purchase orders were processed in 2008, totalling approximately $110 million. It’s important that our process for these purchases is transparent.”

The Auditor’s report states that Markham’s Purchasing By-law supports an “open, fair and competitive procurement process” and that the Town has “adopted strong competitive processes for quotations.” The Auditor General also made recommendations to increase opportunities for achieving the best value for residents’ tax dollars, including:

• developing an integrated town-wide procurement plan and establishing formal analysis of Town expenditures to identify opportunities for improving purchasing outcomes

• improving the quality of vendor data to support purchasing decisions

• implementing mandatory training for staff involved in purchasing activities

• ensuring approvals for low dollar purchases are obtained before goods and services are delivered

• posting bid documents online to streamline the bid-taking process and increase competition.

“On behalf of Markham Council, I thank the Auditor General for her work on this report,” said Mayor Frank Scarpitti. “We have accepted all of her recommendations and have started implementing many of them. We are constantly striving to provide the best possible service and the best value for residents’ tax dollars. The Auditor’s independent review of our processes will help us do exactly that.”

The Office of the Auditor General was established in 2008 by Markham Council to ensure Markham’s operations are managed as effectively and efficiently as possible. The Auditor General’s next report will be on Attendance Management, and is scheduled for later in 2009.