Montgomery County Auditor Pandey identifies two “EXTREME” risks in County Purchasing Department practices

Cover page of Montgomery County Auditor Rakesh Pandey’s internal audit of the County Purchasing Department in which he identified at least two “extreme” risks in Purchasing Department practices.

Conroe, July 30 – Montgomery County Auditor Rakesh Pandey conducted an internal audit on July 5, 2019, of the County government’s Purchasing Department and identified two “extreme” risks, two “high” risks, and several “moderate” risks in the critical County Department’s practices. The Montgomery County government’s purchasing practices have begun to receive more scrutiny from citizens who have begun to raise serious concerns about the politics and massive over-spending within the County government’s purchasing function and Purchasing Department.

The County government released the report appended to the July 30, 2019, County Commissioners Court’s super secretive “consent agenda.” In other words, the likelihood is that the members of the Montgomery County Commissioners Court will never discuss nor will they take any action on Pandey’s findings.

Pandey’s predecessor, Phyllis Martin, whom the Board of District Judges terminated in October, 2018, rarely found any fault in any of her internal audits. Instead, Martin merely whitewashed all activities within the Montgomery County government.

Terminated former County Auditor Phyllis Martin.

On the other hand, Pandey has begun to issue internal audit reports, which provide matter-of-fact statements of concern about County government business practices. Previously, Pandey issued internal audit reports sharply critical of Precinct 4 County Commissioner James Metts’ office and of some of Montgomery County Treasurer Melanie Pryor Bush’s payroll practices.

Rakesh Pandey, C.P.A., will begin as the new Montgomery County Auditor on January 1, 2019.

Pandey identified two business processes in the Purchasing Department which carry “extreme” risk, the use of “cooperative purchases” and “excluded parties.” Pandey also identified two areas of business practices where the risk is “high”: County Property and Special Purchases.

Risk matrix in Montgomery County Auditor Rakesh Pandey’s internal audit of the County Purchasing Department, dated July 5, 2019.

As for the two “extreme” risk categories, Pandey found extreme risks in the Purchasing Department’s and County government’s use of cooperative purchasing which replaces the normal due diligence investigations of the employees of the Purchasing Department. Although Pandey didn’t mention the company in his report, the County government failed to go through its normal due diligence, screening, or contracting procedures for the purchase of Phonoscope fiber optic cable products and services, which corrupt local political boss Marc Davenport and his puppets Precinct 2 Montgomery County Commissioner Charlie Riley and Precinct 4 Commissioner James Metts foisted on County taxpayers as part of an effort by Davenport and some of his “clients” to set up a “real estate investment trust” whereby they could sell fiber optic cable services to private users while using the County government’s Phonoscope system as a trunk line.

County Purchasing Director Gilbert Jalomo has previously confirmed to the Commissioners Court that the Purchasing Department never had contracts for any particular services or products from Phonoscope. The Commissioners Court only approved Phonoscope purchases through the “consent agenda” and without any discussion.

Pandey also identified as an “extreme” risk the County government’s use of federal funds, such as in disaster relief and community development block grand programs, without adequate efforts to identify which vendors for that fund use fall within the federal government’s list of excluded vendors for the receipt of federal money.

Pandey also identified the “high” risk of the County Purchasing Department’s methods of keeping track of County-owned supplies, equipment, and machinery, as well as “Special Purchases.” “Special Purchases” are Construction Projects, Emergency Purchasing, and Sole-Source Purchasing, which, under the politically-charged methods of the Montgomery County government comprise the vast majority of purchasing functions, particularly on road bond projects.

This newspaper has previously reported on dozens of occasions the failure of the Commissioners Court and the Purchasing Department to conduct sufficient investigation and deliberations with respect to such “Special Purchases” and the usual practice of the County Commissioners to award road bond project work to political cronies rather than to companies have a formal competitive bidding process.

County government road work, which comprises approximately one-quarter of all expenditures of the Montgomery County government falls within the dark areas where there is little oversight or scrutiny by the Commissioners Court or Purchasing Department.

Sadly, it is up to the Commissioners Court to take Pandey’s risk assessment and find solutions to reduce the risks in Purchasing Department operations. Therefore, it’s unlikely that any effort to improve the efficiency of the spending of County tax dollars will occur in the near future, especially with the choice to stick Pandey’s very significant report on the super-secret “consent agenda,” where it’s unlikely the Commissioners Court will ever discuss the report.

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