A Report from the City Auditor
Issued August 2025
http://www.sanjoseca.gov/auditor
Presenters: Joe Rois, City Auditor
Alison Pauly, Supervising Auditor
Hiwad Haider, Program Performance Auditor II
Public Safety, Finance and Strategic Support Committee Agenda Item D-2 1
Procurement: The City Should Review Its Risk
Strategy, Performance Measurement, and
Guidance to Improve the Procurement Process
Background
2 • Procurement is a critical City function for
obtaining goods and services
• The Finance Department’s Purchasing
Division oversees most non-public works
procurements, while departments handle
consulting services
• Recent changes raised thresholds and
aimed to simplify processes, but timeliness
remains a concern Citywide
Audit Objective:
Assess the efficiency of the City’s
procurement process for goods
and services, excluding public
works projects.
Finding I: Re-Assessing Risk Strategies in Key Areas Could Improve Procurement Timeliness
3 • RFPs are expected to take about 6-9
months. Three-quarters took longer and
nearly half took over a year.
• The City should review five key areas to
re-assess whether the current policies
align with its desired risk strategy: • Competitive procurement threshold • Minimum insurance requirements
• Software subscription approvals
• Delegations of authority
• Standard contract terms and conditions
Recommendation: To effectively
balance risks and timeliness of
procurements, the City should:
Re-assess policies for key
procurement areas to align its
risk strategy with the need for
timely procurements.
Define and document processes
for pilot programs and
escalation of problems with
contract terms or insurance.
4 • Purchasing’s internal project tracking log
does not capture all milestones, making
performance measurement difficult.
• There are no formal performance
measures for strategic procurements
(RFPs, any purchase requiring a
contract).
• Other jurisdictions use dashboards, cycle
time metrics, and workload tracking to
manage procurements.
Finding 2: Better Tracking of Strategic Procurements
Would Help Measure Progress and Performance
Recommendation: To
strengthen procurement
operations and improve oversight,
Finance should:
Implement a workflow system
to track procurement progress
and develop performance
measures for strategic
procurement cycle times.
5 • Procurement-related resources for City
staff are spread out across over 100
separate links and documents.
• Scope development has been a
persistent challenge for departments.
• The City Policy manual is outdated in
some procurement sections and may not
reflect current processes.
Finding 3: Purchasing Should Consolidate and Update
Procurement Guidance for Departments
Recommendation: To improve
support to City departments,
Finance should:
Develop a consolidated
procurement handbook, and
guidance and templates for
scope development.
Review and update the City
Policy Manual to align with
current procurement
practices.
Conclusion
The report has eight recommendations to improve the efficiency of the City’s procurement process.
We would like to thank the Finance Department, the City Attorney’s Office, the Information Technology Department, and the City Manager’s Office for their time and insight during the audit process.
The audit report is available at www.sanjoseca.gov/auditor Audit staff: Alison Pauly, Hiwad Haider
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