By Robert “Bob” O. Jester
Finance Advisory Committee Chair
As published in The View, August 2022:
Question of the Month: Does the Association have a Procurement Policy?
The short answer to this question is YES, but let’s look at what it states.
Our Board of Directors reviews the procurement policy and revises it as needed. The last revision was in January 31, 2022. It provides the rules for the purchase of ordinary and necessary goods and services for our community. The intent is to increase competition among potential vendors who want to bid on providing goods and services to our community so that we obtain optimum value for these purchases. The policy also provides accountability for the expenditure of funds by the Association.
To accomplish these goals, there are Approval Levels and mandatory bid requirements which you can review on the Association website. Generally, the policy provides that the General Manager may approve purchases of less than $2,500 but must report these expenditures to the Board President and the Treasurer every week. For purchases between $2,501 and $5,000, no bids are required; but the entire Board must authorize such an expenditure.
Purchases of $5,001 to $10,000 require two bids plus a review and recommendation by the Finance Advisory Committee (FAC), with the Board making the ultimate decision. Finally, a purchase in excess of $10,001 requires three bids, a review by the FAC, and a decision by the Board. ALL purchases must identify where the funding will come from in the annual budget. If it is not provided for in the budget, the purchase must be justified, and there must be a disclosure of how it will be funded.
There are numerous other conditions that must also be met for each purchase. One of the most important is that the FAC written recommendation to either approve, modify, rebid, or deny the proposed purchase shall be available for resident review. This provision as well as requiring FAC review on all purchases over $5,001 were only recently included in the latest review of the policy. Before that, the FAC only reviewed Replacement Fund expenditures over $10,000; but it now reviews ALL expenditures over $5,001. This ensures that each and every larger purchase is examined by many eyes before the purchase is made.
To read the Procurement Policy on the Association website, look under HOA, then Documents, then click on the HOA Board file. We hope you will be very pleased that our Association seeks to make its purchase procedures transparent. Members of the FAC plus its Sub‑Committee (including Vice-Chair Zerryl Becker) have a wealth of relevant experience and knowledge gained through their various previous careers.
The Sub-Committee has one opening for a resident who has had a career in construction, engineering, corporate or government purchasing, or other positions where sound monetary decisions were needed. If you have any questions about the functions of the FAC, do not hesitate to contact us at firstname.lastname@example.org.
Contact the author at email@example.com.