Procedures to recommend auditor not followed, county counselor says

Sedgwick County financial staff members did not follow some procedures when it recommended the county keep its longtime auditor, according to the county counselor and manager’s offices.

The contract for auditing services was awarded to a new firm, BKD, last month. A review team of county staff members previously recommended on multiple occasions that its longtime auditor, Allen, Gibbs & Houlik, get the bid.

The Eagle requested copies of e-mails from 17 county officials and staff members regarding the county’s selection process. The e-mails didn’t show discussion among county staff about following the best practice for a recommendation, Assistant County Counselor Jon Von Achen wrote in a separate note to The Eagle.

“It would appear finance staff steered the selection to favor AGH,” Von Achen wrote. “There is no evidence the review team ever met, either in person or by phone, and no indication of any substantive discussion about any of the proposals amongst the evaluation team.”

A county resolution called Charter 65 governs how the county chooses its contracts with businesses.

“Neither the spirit nor in some cases the process described in Charter 65 were followed,” Von Achen wrote to The Eagle.

Von Achen added that there was no evidence AGH tried to “sway or steer the process in their favor.” There were also no e-mails sent during that time by County Manager Michael Scholes.

Scholes told bid board members before they recommended a bid for an auditor that he wanted a new auditor with a “fresh perspective.”

Paul Allen, AGH’s chief executive, said he thought Scholes’ comments were highly unusual and had political underpinnings, which Scholes disputed.

Scholes did not return requests for comment but issued a statement.

“While the process in this particular instance was not appropriately followed, and I am disappointed in that, this was an isolated incident,” Scholes wrote.

Commissioners will vote Wednesday on an updated purchasing policy. Scholes said it will make the process “not only legal and ethical, but as fair and transparent as possible.”

The county’s finance department lost more than $566,000 to fraud in October. And the county announced the department had an interim leader the day before the e-mails were released to The Eagle.

From the e-mails

Here’s a rough timeline gathered from 462 pages of e-mails and documents received from the records request from The Eagle about the county’s bid process from August to December.

▪ Aug. 23: The county receives responses from five bidders on the county’s request for proposal. AGH was the lowest bidder.

▪ Aug. 29: Accounting director Sara Jantz asks two senior financial officials whether they want the responses scored.

▪ Aug. 30: Purchasing agent Kim Evans tells Jantz they can put the auditing services vote on that week’s bid board agenda. In his note to The Eagle, Von Achen said sending a recommendation to the county’s bid board without evaluating it would have been “a clear violation of Charter 65.”

▪ Sept. 8: Jantz asks Treasurer Linda Kizzire whether she wants her department to help review the bids: “I don’t believe this should be a time-consuming project. In fact, I don’t plan on having any meetings.”

▪ Sept. 20: A meeting between Jantz and purchasing agent Kara Kingsley is scheduled and canceled. “This is the only meeting that appears between any members of the evaluation team,” Von Achen wrote. One e-mail recommends AGH win the contract before the evaluation team graded the bids.

▪ Oct. 6: Jantz asks the county manager’s office to schedule a meeting with Scholes and Deputy County Manager Tom Golden.

▪ Oct. 17 and 18: Meetings scheduled to brief the five commissioners about the request for proposals.

▪ Oct. 21: County staff recommends AGH win the contract: “The idea of switching vendors for the sake of having ‘fresh eyes’ was discussed and it was concluded (AGH) offered enough employee diversification that would satisfy any concerns.”

▪ Oct. 24: Kingsley, the purchasing agent, says AGH has the lowest price, lowest hourly rate and offers training: “(But) some may say they have been our auditing firm for too long.”

▪ Oct. 27: At 8:47 a.m., the bid board agenda with the AGH recommendation is sent to more than 50 county employees. But it does not come up for a vote at the 10 a.m. meeting.

▪ Oct. 28: Assistant County Counselor Misha Jacob-Warren writes a change to the county’s request. It asks that the county’s auditor publish a separate report about the county’s internal financial policies and vulnerability to fraud. Sedgwick County’s fraud case was made public two days earlier.

▪ Nov. 2: Jacob-Warren asks that any vendors’ questions be sent to her and Golden, the deputy county manager.

▪ Nov. 14: Purchasing director Joe Thomas sends the vendors’ responses to the updated request to Golden, Jacob-Warren and Scholes, the county manager.

▪ Nov. 29: A draft recommendation says AGH should provide both auditing services and the separate report.

▪ Dec. 5: An updated recommendation says AGH should perform the main audit but that BKD do the separate report: “AGH will offer a smoother auditing process based on their history and knowledge of Sedgwick County practices.”

▪ Dec. 8: That staff recommendation is put on the bid board agenda. Kizzire, who is on the bid board, notes she received it 10 minutes before the meeting.

Scholes tells the bid board he wants a “fresh perspective” with BKD performing the audit and the separate report. After little discussion, the bid board votes unanimously to contract with BKD on both services.

This story was originally published January 16, 2017 at 5:24 PM with the headline "Procedures to recommend auditor not followed, county counselor says."