More than a month after former Mayor Jerry Slusiewicz began publicly raising questions over overpayments to the city’s tree-trimming contractor, the Laguna Niguel City Council received an independent accountant report on Tuesday, Sept. 5, recommending the city improve internal controls and monitoring.
Representatives from the Pun Group, which also serves as the city’s auditing firm, presented the six-page report at a council meeting lasting more than four hours.
The report, described by representatives Kenneth Pun and Frances Kuo, looked at agreed-upon procedures as it related to the city’s purchase orders and contract processes and highlighted multiple instances where the city could make improvements.
In one instance, the report found the invoiced amounts for West Coast Arborists services were above the contract amounts.
According to the report, the city’s approved annual contract amount with West Coast Arborists was $140,000. The report found the city’s invoiced amounts over the past two fiscal years were $210,000 and $460,000.
“We recommend the City improve its internal control activities and monitoring processes over multi-year contracts,” the report stated. “When additional work is needed, change orders need to be approved prior to commencement of additional work.”
The report also found other issues, including one instance where the parks and recreation director approved a $24,000 purchase order when the approval threshold was $10,000.
City staff responded to the report’s findings and offered explanations in addition to offering ways to address the concerns.
In one instance, city management said the purchase order approved by the parks and recreation director had been approved by the purchasing manager, but an “administrative oversight” resulted in the wet signature being left off the purchase order, according to the report.
In other instances, city management agreed with the findings and vowed to tell city staff to obtain approval through a purchase order or similar agreement before initiating a purchase, according to the report. The city’s response stemmed from a finding that a vendor issued an invoice before a purchase order was issued.
The agreed-upon procedures report began in April 2017, after former Mayor Slusiewicz and former Mayor Pro Tem Fred Minagar requested the Pun Group examine purchase orders and contract processes over a two-year span, according to a staff report.
Slusiewicz is currently serves as a…