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City Wasting $5.6 Million, Audit Shows

A long-awaited audit of the city's procurement services has revealed a potential $5.6 million in savings to the city, including at least $5.1 million in annual savings by using an online state procurement system.

Oddly, Richmond was the first registered user of the state procurement system, known as eVA, when it went live in 2005. But the city has since stopped using the system.

The state program allows localities to streamline buying and service contracts by picking from menu of pre-qualified vendors who must also compete to offer the lowest or best price. More than 660 state and local agencies including Henrico County already use the system.

Easy-to-use and "virtually free," the eVA system accounted for the bulk of the savings that City Auditor Umesh Dalal identified.

Sidestepping many of the report's findings, the city's Chief Financial Officer Harry Black indicated in his official response that "it is clear that many of your recommendations will require an expenditure of resources."

The report also found numerous weaknesses in the procurement department's methods to guard against fraud, among them a business-as-usual tendency to order goods or services before establishing a purchase order. He also notes a preponderance of emergency procurements.

"Procurement services provided a list of 38 emergency transactions in which the city procured $49 million or 15 [percent] of total citywide procurements," Dalal's report reads. "Further testing confirmed that this list was neither accurate nor complete."

Though not highlighted, or even considered in the audit, many of the payments for services resulting from the Sept. 21 attempted eviction of the Richmond School Board from City Hall relied on purchase orders created after the service was performed.

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