Audit finds California squandering purchasing power

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At a time when California is painfully squeezed for cash, it has been shopping unwisely and likely squandering a good deal of savings, according to a report released Thursday by state Auditor Elaine Howle.

The state was able to save $160 million over two years by using a new contracting plan that leveraged its considerable buying power on the goods and services it used most but had not fully employed the strategy on many other purchases, Howle said in a letter to Gov. Arnold Schwarzenegger that accompanied her report. The auditor said her review found that the Department of General Services had used the ‘strategically sourced’ purchasing method on 33 contracts to save money.

But, she found, the department had not used the cash-saving method for years: ‘General Services has not entered into any strategically sourced contracts since July 2006, and it is not reviewing comprehensive purchasing data that will allow it to identify new opportunities effectively.’

Howle also faults General Services for failing to put in place procedures to recover state funds when it identifies a contractor that has not complied with the pricing terms of its contract.

General Services officials said they were ‘fully committed to promptly and completely addressing the issues identified,’ the audit said.

-- Patrick McGreevy