JACKSON- State Auditor Stacey Pickering released the Performance Review of Madison County Contracts with Rudy Warnock.
Based on the limited review done by the State Auditor’s Performance Audit Division, it is OSA’s recommendation to Madison County to improve its oversight and management controls.
“This report includes a review that can be helpful to many counties and cities across Mississippi to ensure the taxpayers are protected against potential loss as a result of weak contracts,” said State Auditor Stacey Pickering. “Contracts are an important part of management and operations for local governments but it is critical that all of the necessary precautions are taken by elected officials and management when entering into and executing contracts.”
The following issues were identified that create control weaknesses and could lead to potential losses to the County:
- The Board not requiring sufficient documentation supporting payment claims
- Seemingly poor contract construction approved by the Board
- Poor oversight and monitoring of contracts by the Board in light of voiced concerns by individual supervisors
- Potentially duplicative payment terms allowed in contracts
Of the contracts reviewed:
- 22 were properly spread upon the Board minutes
- 8 lacked an effective date
- 9 included titles and/or headings that did not correspond with the actual work described or the effective dates of the contract
- 10 included, for multiple services, flat rate/lump sum payments in addition to percentage payments and additional reimbursable payments which, when added together, resulted in more than 14% of the total estimated construction costs per project
- 18 provided reimbursement for expenses that might normally be considered overhead expenses covered in lump sum payments
- 14 showed missing, incomplete, or ambiguous scope of service terms
- 15 contained inapplicable terms and contract sections
- 6 lacked estimated construction cost totals, even though this amount is the basis of the percentage payments and even though there is a place in the contract designated specifically for such an amount
The State Auditor’s Office received several requests for a review of contractual issues specifically relating to Madison County and the contracts with the County Engineer, Rudy Warnock and the effectiveness of the contract management by the County in March 2010. The review began in April looking into road construction contracts with Rudy Warnock of Warnock and Associates. The review was divided into two parts – a contractual analysis and a financial analysis. The contractual analysis is provided in this report. The financial analysis will be released at a later time.