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06-24-15 - 15-107 - Performance Audit - Citywide – Use and Management of Staffing Agency Employees

The City has increased its use of staffing agency employees by 72.5 percent over the past five years, however, there is not one City department that has overall responsibility of monitoring and managing the use of this service. Each department is responsible for managing its own use, which has contributed to inconsistencies and violations of the contracts, request for bid (RFB) terms, and policies and procedures (P&P). The City has designed and implemented internal controls over obtaining, using, and managing staffing agency employees. However, these internal controls, which are detailed in the vendor contracts, RFB documentation, and P&P, are not consistently distributed and communicated to the department personnel in charge of obtaining, using, and managing staffing agency employees. This has caused many departments to be unaware of rules, regulations, and P&P regarding staffing agency employees, and consequently, has been the root cause of the exceptions. The current contracts the City has for staffing agency employee services are overdue to be rebid. The City can ensure that it is paying the most competitive prices, and offering departments the best staffing agency employee services by rebidding these contracts.

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The purpose of this audit was to review, test, and report on the use and management of staffing agency employees by City departments for an 18-month period from July 1, 2013 through December 31, 2014.

Summary

The City of Albuquerque’s (City) spending on staffing agency employees has increased 72.5 percent in the past five years, from $6.2 million in fiscal year (FY) 2010 to $10.7 million in FY2014. The City has not assigned responsibility to one department or division to act as the “owner” for the use and management of staffing agency employees. Instead, the various user departments manage the use of staffing agency employees independently.

Most user department personnel responsible for obtaining, using, and managing staffing agency employees are not aware of the contract terms, RFB terms, and P&P related to staffing agency employees. This lack of awareness has led to inconsistent compliance with rules and regulations over obtaining, using, and managing staffing agency employees. Due to this, staffing agency employees have not been properly requested; have been used for periods longer than permitted; and have performed duties not consistent with the positions they were engaged to fill. In addition, overcharges on vendor invoices for some staffing agency employees were not identified by the user departments.

Current contracts with staffing agency vendors should be rebid. Over the last two years the City has lost two vendors, and must now rely on the two remaining vendor contracts, which have been extended at least 17 times for periods of two to six months.

Recommendations & Benefits

By appointing one City department with overall responsibility for monitoring and managing the use of staffing agency employees the City will:

  • Be able to ensure all user departments are appropriately obtaining, using, and managing staffing agency employees.
  • Be able to continually update rules, regulations, P&P in an effective and efficient manner.
  • Be able to quickly identify and remedy any issues.

By rebidding the staffing agency employee service contracts the City will:

  • Be able to obtain the most competitive pricing.
  • Be able to offer user departments better customer service from the vendors.

With the exception of appointing one City department with overall responsibility for managing the use of staffing agency employees, the Chief Administrative Officer agreed with the recommendations in the report. Detailed management responses can be found in the report.