PANAMA — State officials say Panama Central School needs to tighten its procurement policies.

An audit from the state Comptroller’s Office found school officials did not always comply with the district’s procurement policies or General Municipal Law Section 103. The audit also states that the claims auditor for the district did not perform adequate claims audits, and both of these together resulted in $1.1 million in purchases being made without competitive procurement methods.

“Therefore, the board, officials and the claims auditor did not help ensure that district funds were used to procure goods and services in a prudent and economical manner, in the best interests of taxpayers and that procurements were not influenced by favoritism, extravagance, corruption or fraud,” the audit continued. “Certain dofficials delegated their procurement responsibilities to other individuals and did not ensure these individuals were adhering to the procurement policies and GML Section 103. The claims auditor also relied on other district officials to perform her job responsibilities and did not ensure District officials complied with the procurement policies and GML Section 103.”

The district’s procurement policies were last updated in 2023 and require officials that are authorized to make purchases and employees to analyze potential purchases, in order to determine whether the competitive bidding process is needed to procure goods and services being purchased, according to the audit. These policies stand for any purchase of supplies or equipment that exceed $20,000 or is expected to exceed that amount in aggregate for the same commodity or service in the same year. This also applies to public works contracts that exceed $35,000.

The audit also says that the policies require procurement officials and employees must procure all estimated purchases for supplies or equipment; of less than $20,000, but greater than $3,000, using written quotes from at least three vendors, of less than $3,000, but greater than $1,000, using written quotes from at least two vendors, or of less than $1,000 using one written or verbal quote.

“Procurement officials and employees should be familiar with the policies and adequately perform their associated procurement responsibilities,” the audit states. “When procurement officials and employees are not familiar with the policies, or they deviate from established procurement guidelines, they cannot help ensure that purchases are a prudent and economical use of public funds, in the best interests of taxpayers, not influenced by favoritism or extravagance and not subject to possible waste, corruption or fraud.”

In the review of Panama Central School’s purchases of goods and services totaling around $2.1 million made during the audit period, the state comptroller’s office reports in the audit that their findings show that board and district officials did not always follow these policies, resulting in purchases totaling approximately $1.1 million that should have been individually, or in aggregate, subject to competitive bidding, purchases totaling approximately $597,000 for professional services that should have been procured through an RFP process, and purchases totaling approximately $412,000 that should have been procured using quotes.

“The superintendent told us that he relied on the purchasing agent to ensure compliance with the policies,” the audit said. “The purchasing agent told us that she relied on the department heads to comply with the policies. The claims auditor told us that she did not review for compliance with the policies, as part of the claims audit, because she assumed that the superintendent and purchasing agent reviewed claims for compliance with the policies. Because district officials and the claims auditor did not ensure that procurement officials and employees complied with the policies, the district procured goods and services that were not competitively bid, and officials missed opportunities to reduce costs or save taxpayers money.”

The audit recommends to the school district that the school board and superintendent require the purchasing agent to enforce and monitor compliance with the policies, and ensure that all procurement officials and employees are aware of the policies and require them to seek competition, as prescribed by the policies, before making purchases. The purchasing agent should ensure that procurement officials and employees comply with the policies and procedures by obtaining the required number of bids, quotes and proposals for each purchase.

The claims auditor should monitor compliance with the policies as part of her claims audit process and ensure that procurement officials and employees obtain the required number of bids, quotes, and proposals for each purchase.

In the response from the school included in the official audit and signed by Panama Superintendent Aaron Wolfe, the school acknowledged the findings and promised to begin making corrections.

“The district continuously seeks opportunities to further the use of taxpayer dollars and appreciates the assistance received from the Office of the State Comptroller,” Wolfe said in the response. “The district immediately began implementing corrective action measures mid audit and will submit a detailed corrective action plan within the 90-day requirement.”