Wausau acknowledges years-long failure to follow procurement policy

As members of Wausau’s Finance Committee this week reviewed suggested revisions to the city’s procurement policy, top staff admitted some current guidelines have been ignored for years, with multiple contracts that lack some signatures and legal review.

Mayor Doug Diny now aims to change that. On Thursday, Diny told Wausau Pilot he will direct staff to adhere to the city’s existing policy, which requires having legal counsel review all contracts meeting certain thresholds.

The purpose of a procurement policy is to ensure taxpayer funds are spent wisely when buying good and services, while minimizing fraud, waste and abuse in purchasing.

In Wausau, the city’s current policy explicitly states that contracts will be signed by the mayor and counter-signed by the city clerk, finance director and city attorney. That language is clear. But statements made Tuesday by Finance Director Maryanne Groat and City Attorney Anne Jacobson show that these portions of the policy have frequently not been followed. The counter-signatures of the finance director and city attorney are often absent from those documents, officials acknowledged.

On Tuesday, Dist. 5 Alder Gary Gisselman asked point blank whether the city attorney actually approved all contracts. She responded by saying she doesn’t know if she sees “10 percent of the contracts that come into the city.”

“I don’t know who’s signing them,” Jacobson said Tuesday. She said she wanted the language removed from the procurement policy because she doesn’t see all the contracts.

“But no, I have never reviewed all the contracts that are signed, binding the city,” Jacbson said. “No, that has not happened.”

The policy document itself explains the rationale behind the signature requirement. The finance director’s signature certifies that “funds have been provided by the Council to pay the liability that may be incurred under the contract.” The city attorney approves the form of the contract, while the clerk attests to the mayor’s signature, the policy now states.

Wausau Pilot & Review reached out to Mayor Doug Diny, Jacobson, Groat and Finance Committee Chair Michael Martens with questions asking them whether the current policy has been followed, if city staff alerted committee members about non-compliance and when the mayor became aware of the discrepancy.

Of those contacted, only the mayor provided comment.

“My priority is that directors have proper onboarding and training on a myriad of policies and procedures that over time have lost institutional knowledge,” Diny told this newspaper. “The procurement process is one topic that has surfaced where policy doesn’t match practice.”

He said that over the last five weeks, a number of issues have popped up that have led him to believe that there are weaknesses in the implementation of the city’s contracting and procurement processes.

“It is the job of the mayor and the city council to make sure that senior staff do their jobs,” Diny said. “We need to tighten up operations and do it quickly.”

In a subsequent email, he said that ultimately, it is the responsibility of the legal department and finance department to reconcile the policy and square it with the City Council.

Some members of the Finance Committee appeared nonplussed by the revelation, which arose as city staff floated new language that would remove the signature requirement. Others were visibly shocked, including Dist. 3 Alder Terry Kilian, who asked for more safeguards for the city – not less.

Kilian stressed that the city attorney and the finance director must be part of reviewing and signing contracts – the exact provision that city staff now seeks to remove from the policy document.

Dist. 6 Alder Becky McElhaney suggested that mentioning the two officials in the policy document is redundant and said that requiring the attorney to approve every such contract will slow down the process.

But on Thursday, the mayor said Wausau will now follow the statutes and “will begin following best practices.”

Diny said he contacted officials in several other Class 2 cities in Wisconsin and found they all have the city attorney’s office review and sign off on all contracts. He said more investigation is warranted before any prop0osed changes come before the City Council in August.

“I will also encourage better use of standard contract templates, and standard city terms and conditions to help streamline review,” Diny said. “I will be following up and seeking input from other cities and resources like the League of Municipalities on best practices in procurement.”

What’s next?

On Tuesday, City Attorney Jacobson said she was working to try to clarify which officials have the authority to sign various contracts and “train staff appropriately as to what they can sign and not sign.”

That prompted Dist. 9 Alder Victoria Tierney to say that the council wants to know who exactly signs all the contracts. “I just think that it would be good to know who is responsible for signing what types of contracts in order to even keep track of those,” Tierney said.

Kilian too said she wanted an added level of protection for the city.

Given the alders’ concerns, Jacobson said she will work with the Finance Committee to delineate “which contracts come to which the department director and which should come to the attorney’s office” and bring it back for review. That appeared to satisfy the alders.

Other provisions were approved by a unanimous vote including one that doubles the contract amount that requires approval by the City Council.

With the change, intergovernmental contracts between the City of Wausau and other local, state or federal governments or agencies will require council approval only if they are above $10,000. The previous ceiling was half that amount. This change, among other updates, is subject to the City Council approval.

The policy review is periodic, typically done every couple of years. The last update was done in 2021.