This summary report is in draft form and is subject to change based on new information which may be developed prior to its official release. I EXECUTIVE SUMMARY In this review, the Office of Public Integrity (OPI) examined the City of Rochester?s compliance with local and state Minority and Women-Owned Business Enterprise as well as the City?s oversight of the program. We noted the following observations that require corrective actionto improve program administration and strengthen relevant internal controls. This will ensure the program is administered effectively and that participants receive its full benefit. em 0 Even though some of the MNVBE ordinances have expired, the City has continued to administer the MNVBE program rquirements listed in the ordinance for public works contracts and competitiye~bid contracts. Per the Law Department, the City can determine Utilization goals for these types of contracts, however, the goals are. voluntary and not mandatory. Public Works Contracts: review examined a sample of contracts for compliance with MNVBE goals on a per contract ba'sisand did not expand the testing to examine the MNVBE program for the. City on an annual basis. The original ordinance included both per contract and annual goals. 0 A City contractor evaded the MNVBE participation requirements by using an MNVBE sub?contractor as a ?pass-through?. Payments were routed through the MNVBE sub-contractor to achieve the appearance of participation. 0 TheBureau of Purchasing inadvertently approved the initial plan to authorize materials alone to count toward the utilization goals. This is in violation of the City?s requirements. Furthermore, the .. Bureau of Purchasing erroneously included additional unallowable expenses to count toward the utilization goals. I a An MNVBE sub-contractor contracted 100% of their work to a firm resulting in a utilization shortfall. 0 UPI noted some contracts in which the MNVBE sub-contractor performed a small amount of labor on the contract but purchased large amounts of materials/supplies from a sub-contractor. This summary report is in draft form and is subject to change based on new information which may be developed prior to its official release. 9 UPI noted some of the contracts examined did not meet the MNVBE utilization sub-group goals even though the City?s MNVBE Officer granted a waiver or a reduction in the utilization goals for these contracts. 0 OPI noted the majority of contracts examined increased in value due to change orders, however, their MNVBE utilization amounts did not proportionately increase. noted revised ?Schedule of MNVBE Participation? forms _for contraCts incurring a change 'of 5% or more were either missing or decreased the utilization amount instead of Increasing them in proportion to the increase in the contract value. 0 The City is unable to verify whether MNVBE partiCipation expenses are valid because the City relies upon the prime contractor?s word for the amount expended by sub-contractors without obtaining supporting documentation to substantiate the MNVBE participation. 0 noted several instances where Supporting documentation that obtained directly from the prime contractors and/or the sub- contractors differed from the amount the prime contractors reported on the final progress reports at the Completion of the project. 9 noted some preconStruction forms were missing from City records. 9 The utIlIzatIon plans are too vague. and do not provide a detailed description The Bureau of Purchasing?s MNVBE summary reports do not accurately cathre whether MNVBE utilization goals have been achieved. The report includes composite proposed contract amounts prior to the work being performed compared to the MNVBE goals instead of capturing actual expenditures paid for all City?department contracts to determine 7; whether goals were actually achieved. Professional Service Agreements OPI noted that the City does not have an adequate reconciliation process to verify whether MNVBE goals have been achieved for 0 We noted the Department of Environmental Services (DES) MNVBE architectural/engineering services utilization report only captures proposed This summary report is in draft form and is subject to change based on new information which may be developed prior to its official release. goals and does not include actual expenditures paid to vendors/consultants nor does it include change orders impacting the percentage of utilization. 9 OPI noted that both NYS certified vendors/consultants located outside the Rochester Metropolitan Statistical area and non- -certified vendors/consultants were included in utilization reports for the PSA category Architectural/Engineering. The Bureau of Purchasing combines both certified and non-certified vendors/consultants expenditures in calculating their annual utilization for personnel training/testing and advertising/media professional services. 0 The City lacks a standardized process for vendors/consultants to request and obtain a City waiver for arChItectural/engmeenng professional service agreements. - 0 City administration does not receive a status report on the program indicating whether utilization goals were actually achieved for each category. For FY-2014 and FY2015, noted that the City fell short in meeting the City?s annual PSA IWWBE Utilization goals for all but one category. 9 DES is communicating to awarded vendors/consultants that they are not required to strictly meet each of the goals but rather participation in one or more of the would be acceptable. DES either did not meet any of the City?s sub-group utilization goals or only met one sub-group goal for the tested in the Architectural and Engineering category. 0' -5 {The City?s Officer primarily oversees the Department of Environmental Services (DES) public works contracts for compliance with participation goals and acts as a consultant for other City departments that administers contracts and 0 The goals for public works contracts and have not been modified since 1994. This summary report is in draft form and is subject to change based on new information which may be developed prior to its official release. NYS Contracts: 9 Of the seven NYS contracts examined, two received a waiver of the utilization goals or an exemption and four did not meet their respective NYS goals in their entirety. Supporting documentation for one of the contacts was not available for to review and therefore we could not verify whether goals for this contract were met. 9 OPI noted a lack of communication and standardized process between departments administering contracts with components and the City?s Officer. The Rochester Police Department (RPD) did not complete and submit NYS forms to report actual participatioQLfOr-one contract examined. Additionally, there was no MNVBEcompany utilized on this contract and as a result NYS achieved. 0 Even though NYS granted a waiver tothe City for the FY2014-15 SOOP grant administered by DRYS, the City applied and received this waiver a year after program expenditures were incurred. OPI noted that non? ?certified companies were included' In the utilization plan and/or the Affirmation of Income Payment to 9 OPI noted an NBD contract lacked sufficient documentation to support project utilization amounts. In addition, a required form to be submitted by the prime contractor to a NYS agency was not on file with the City. fOPlenoted numerous clerical errors in the MUNIS information programs for . reporting. Either the fields areinaccurate or not consistently utilized. In addition, the City?s vendor input forms, to add/modify vendor records on IVIUNIS, do not distinguish between certified and non-certified vendors. 9 The progress forms completed by the prime contractor throughout the phases of each public works contract are not included on MUNIS nor are they used to reconcile or to verify goals achieved or actual payments made to sub?contractors. This summary report is in draft form and is subject to change based on new information which may be developed prior to its official release. 0 data that is collected for a given Contract is not centralized in a single, easily accessible location, such as MUNIS. Rather, the data is fragmented amongst various departments/bureaus.