le_arietta by chrstphr


									ALAN G. HEVESI                        STATE OF NEW YORK                               MARK P. PATTISON
                                                                                     DEPUTY COMPTROLLER
                                          110 STATE STREET                         AND ECONOMIC DEVELOPMENT
                                       ALBANY, NEW YORK 12236                Tel: (518) 474-4037 Fax: (518) 486-6479

                                                  December 16, 2005

  Mr. James C. Bernier, Supervisor
  And Members of the Town Board
  Town of Arietta
  P.O. Box 37
  Piseco, NY 12139

  Report No. P5-5-33

  Dear Supervisor Bernier and Members of the Town Board:

  One of the State Comptroller’s primary objectives is to identify areas where local governments can improve
  their fiscal operations and provide guidance and services that will assist local officials in making those
  improvements. Our goals are to develop and promote short-term and long-term strategies to enable and
  encourage local government officials to reduce costs, improve service delivery and to account for and
  protect their government’s assets.

  In accordance with these goals, we conducted a regional audit to provide local government officials with
  information to determine whether the purchasing practices of local governments have led to significant
  differences in the amounts paid for similar large equipment. The Town of Arietta (Town) was included in
  our audit. Our audit of the Town’s operations was limited to an examination of large equipment purchases
  made during the 2003 and 2004 calendar years.

  This report of examination letter summarizes our findings and recommendations specific to the Town of
  Arietta. We discussed the findings and recommendations with Town officials and considered their comments
  in preparing this report. The Town’s response is attached to this report in Appendix A. At the completion
  of our audit of the ten government units, we will prepare a global report that summarizes the significant
  issues we identified at all the government units audited.

Background and Methodology

The procurement practices in the Town of Arietta are typical of the methods used by other local governments
in the region. Generally, towns employ one of two options for the purchase of new large equipment: either
advertising for competitive bids from vendors or acquiring the equipment under the terms of the New York
State or applicable County contract, as an exception to competitive bidding requirements. Our audit
assessed whether local governments were utilizing the most effective means of purchasing large equipment.
As part of our audit we surveyed 60 local governments from 10 counties to determine what types of
equipment they had purchased in 2003 and 2004; whether the purchases were made through a competitive
bid process or under State or County contract; and how much was spent for the equipment purchased.
During our audit period, 46 plow trucks were purchased by the local governments included in our survey.
We noted that the prices paid for plow trucks ranged from approximately $106,000 to $152,000. We
also noted that plow trucks that were purchased through a competitive bidding process were generally
more expensive than those purchased through the New York State contract. Upon investigation, the most
expensive plow trucks purchased resulted when bid specifications used to advertise for bids were provided
by a truck dealer that was ultimately awarded the bid. Our survey noted that local governments utilizing the
State contracts typically recognized a savings ranging from $20,000 to $30,000 compared to those who
did not.

We conducted our audit in accordance with Generally Accepted Government Auditing Standards. Such
standards require that we plan and conduct our audit to adequately assess those Town operations within
our audit scope. Further, those standards require that we understand the Town’s management controls and
those laws, rules and regulations that are relevant to the Town’s operations included in our scope. An audit
includes examining, on a test basis, evidence supporting transactions recorded in accounting and operating
records, and applying such other auditing procedures, as we consider necessary in the circumstances. We
believe that our audit provides a reasonable basis for the findings and recommendations contained in this

Audit Results

During 2004, the Board authorized the purchase of a new 2005 single axle plow truck. A local truck
dealer provided the specifications for the Town to advertise for competitive bids and ultimately this dealer
was the only vendor submitting a bid. The Board accepted the bid and authorized the purchase totaling
$114,993 without rejecting the bid and re-advertising to seek additional competitive bids. Our review of
the specifications leads us to question whether competition may have been discouraged due to overly
restrictive specifications. Although there is no absolute prohibition against a prospective bidder preparing
specifications, such specifications should be carefully scrutinized to ensure that they have not been tailored
for that firm to the exclusion of others or that they otherwise impair the competitive process. The specifications
in question included specific brand names for the transmission, steering and tires. In general, specifications
should be drafted to allow vendors supplying reasonably equivalent items to compete on an equal basis. In
this case, restrictive requirements may have narrowed the field of prospective bidders and caused the
Town to pay more than necessary for the plow truck.


The Town Board, in the context of approving equipment purchases, should take an active role in reviewing
equipment specifications prior to advertising for bids, especially when utilizing vendor specifications, to
prevent any unduly restrictive language that could prevent competition. The Office of the State Comptroller
is available to provide technical assistance in this area.

The Town Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General
Municipal Law, the Town Board should prepare a plan of action that addresses the recommendations in
this report and forward the plan to our office within 90 days. We encourage the Town Board to make this
plan available for public review in the Town clerk’s office. See the attached document for additional
information on filing a corrective action plan. Our office is available to assist you upon request.

If you have any questions regarding our findings, please contact Gary Gifford at 518-793-0057 or write to
our Glens Falls office at One Broad Street Plaza, Glens Falls, NY 12801.


                                                 Steven J. Hancox
                                                 Assistant Comptroller

cc: Kenneth Parslow, Town Clerk

                                            APPENDIX A

                             RESPONSE FROM TOWN OFFICIALS

The Town officials’ response to this audit can be found on the following page.


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