CONTRACTING AUTHORITY: Follow the Rules to Protect Your Unit AND the University

January 30, 2018  |   Issue 5

A recent newspaper article reported that personnel at a SEC University were ratifying contracts without proper authority. This activity includes implementing and executing contractual obligations for the University. Unbeknownst to these departments, overpayments of $171K occurred.

Recent UKIA audit evaluations have identified similar weaknesses due to inappropriate contracting authority. In several instances, UKIA noted that the proper University officials were not involved in contracting activities. Such procedural gaps have resulted in the following:

• Violating Kentucky Revised Statues leading to fines and penalties
• Redundant services resulting in a waste of resources
• Higher pricing to the University
• Conflicts of interest

The University of Kentucky has stopgaps in place to ensure contracts are ratified appropriately. Unfortunately, when our departmental practices do not strategically align with our policies, opportunities for waste, fraud and abuse increase. In our current environment, which could be considered the ‘new normal,’ inappropriate practices such as these could have a tremendous impact on our ability to continually meet our mission.

The University has delegated the procurement function, including contracting, to the Purchasing Division. Departments requiring contract services should provide Purchasing with the following:

• complete information on the needs
• scopes and time frames
• special qualifications
• estimated costs
• source of funds
• any other information that may be available about requirements

UKIA can help you locate gaps in your processes that leave your unit vulnerable to inappropriate activities. Let us help you improve your operations BEFORE something happens. Call us at 257-3126, or check out UKIA’s services here. OR, if you just need some tools or training to make what you already have in place more efficient and effective, the UK Purchasing Division offers a number of resources here.