April 8, 2015 unlidcnlizli Special Audit imcmatinnal Body?W011] ?21 Allmum?muc l?vlicg' Dq?liH'imCi?I Report No. 14-107 - . CITY OF ALBUQUERQUE OFFICE OF INTERNAL AUDIT Background Albuquerque City Councilor Ken Sanchez (Councilor Sanchez) requested an audit of the Albuquerque Police Department?s (APD) body-wont camera procurement process. Councilor Sanchez stated that it was his understanding that the contract was awarded on a ?no-bid? basis and there have been concerns expreSSed about the relationship between TASER International (TASER) and tOp management. Based on these concerns, Councilor Sanchez asked the Of?ce of Internal Audit (01A) to ?conduct a thorough and detailed audit of the entirety of the procurement process leading up to the signing of the TASER contrac direct relationship with TASER began in 2007', when the City contracted directly with TASER for the purchase of electronic control devices and ancillary products. Beginning in October 2012, APD performed testing and evaluation of camera products and services, including the Axon Flex cameras. The products for that testing were supplied by TASER at no cost to APD. Findings initial purchase (Pilot Purchase) from TASER, for the pilot test of 7'5 Axon Flex body-worn cameras and Evidencecom data storage services, was made on March 27, 20B. This $106,855 purchase did not comply with the City of Alhuquerque?s (City) competitive procurement process. APD personnel bypassed purchasing regulations and approvals and compromised the integrity of the procurement process. They neglected their responsibilities as government employees to determine the Department?s speci?c needs and then initiate a competitive procurement process to get the best product at the lowest price. The Pilot Purchase was then used as the basis for justifying the non-competitive purchase of Evidencecom and associated products on September 30, 2013. The non-competitive procurement was processed as an ?Other Exempt Purchase and totaled $1.9 million. The City signed standard services contract. with a few modi?cations, for the OEP purchase. By signing services contract, five mandated clauses that limit risk to the City and allow independent contract oversight are excluded from the {ill .9 million contract. Former Chief of Police entered into a contractual relationship with TASER in October 2013, while on early retirement, and still technically employed by the City. The Former Chief continued to serve as a contractor after his of?cial retirement date of December 31, 2013. City employees are prohibited from representing businesses in connection with matters in which they performed of?cial acts, for one year after retirement. In addition, other APD personnel accepted meals, travel, and lodging from TASER. APD personnel also solicited sponsorship donations from TASER. The acceptance of meals and other gratuities, and the solicitation of funds from vendors are not consistent with City con?ict of interest regulations. APD was charged $25,243 for overlapping Evidencecom services associated with the Pilot Purchase from August 15, 2013 to March 27, 2014 and should request a re?ind from TASER. Recommendations and management responses are included within the audit report. April 8, 2015 Accountability in Government Oversight Committee PO. Box 1293 Albuquerque, New Mexico 87103 Audit: Special TASER International Body-Worn Camera Procurements Audit No. 14-107 PRELIMINARY DRAFT The Of?ce of Internal Audit (01A) conducted a special audit of the Albuquerque Police Department?s (APD) body-worn camera procurements with TASER International (TASER). The audit was requested by City Councilor Ken Sanchez (Councilor Sanchez). The audit objectives, scope and methodology can be found in Appendix A. Councilor Sanchez stated that it was his understanding that the contract was awarded on a ?no-bid? basis and there were concerns expressed about the relationship between TASER and top management. Based on these concerns, Councilor Sanchez asked the OIA to ?conduct a thorough and detailed audit of the entirety of the procurement process leading up to the signing of the TASER contract." The Of?ce of Inspector General (010) and New Mexico Of?ce of the State Auditor (OSA) also received requests from members of the City Council. The requests asked 016' and OSA to investigate the potential con?icts of interest between APD and TASER. In an effort to decrease the burden on APD, personnel from OIA, OIG and OSA shared information throughout the review process. ?ndings will be published in a separate report numbered 14-207. The following glossary of terms provides de?nitions for common terms that are used throughout the report. Glossary of Terms Axon Flex Cameras Body-worn cameras manufactured by TASER and purchased by APD. Special Audit TASER International Body-Wom Camera Procurements 14-107 April 8, 2015 Body-Worn Cameras Video recording systems that are typically utilized by law enforcement to record interactions with the public and gather video evidence at crime scenes. Contract Release Order (CRO) Purchase mechanism that allows user Departments to purchase speci?c products and services from authorized contracts. Electronic Control Devices Devices that are used for the non-lethal restraint of individuals. {Commonly referred to as tasers] Evidence.com cloud based digital evidence management system. Former Chief of Police (Former Chief) Albuquerque Police Chief who was appointed in 2005 and of?cially retired on December 31, 2013. Other Exempt Purchase (OEP Purchase) Procurement that is exempt from the City?s competitive procurement regulations. The term will also be used to identify second purchase of TASER Evidencecom and Axon Flex cameras at a cost of $1.9 million. Pilot Purchase ?rst purchase of 7'5 TASER Axon Flex cameras and associated services at a cost of$106,855. TASER International (TASER) City vendor that supplies APD with electronic control devices and body-wom camera products and services. APD made two body-worn camera purchases from TASER. The details for each purchase are outlined in the table below. APD Purchases Details for TASER Body-Worn Cameras 4' Purchase Detail Pilot Purchase I Purchase i Number of Cameras T5 1 525 5 Productnmount I 106,855 26.000 . -: 1~924~2_13 Date of Transaction . March 37. Jill} 3 September 30? 2m 3 i Source: Cit},r Contracts m??l?o?nm m- I .13?ww?r ([in ol' Jllicc ml Internal Aunlit 2 Special Audit TASER International Body-Worn Camera Procurements 14-10? April 8, 2015 Histogy of use of TASER Products APD has purchased TASER electronic control devices since 2000. From 2000 to 2006 APD purchased TASER electronic control devices from authorized TASER distributors. The graph below illustrates the history of direct contracting relationship with TASER from 2007 forward. Progression of TASER Purchases and Procurements In 2007, the City contracted directly with TASER for the purchase of electronic control devices and ancillary products. The City used a sole-source procurement methodology to establish the contract.-. -v-v -. -September 2012 - APD received four Axon Flex kits for testing and evaluation purposes. *October and November 2012 - APD tested and evaluated Axon Flex cameras and Evidencecom. vNovember and December 2012 - APD's Former Chief asked for a roadmap for initial deployment of Axon Flex cameras in February 2013 and ?ull deployment in September 2013. - March 2013 - APD purchased 75 Axon Flex Cameras at a cost of $106,855 and received a fully discounted one-year subscription to Evidencecom. - September 2013 - APD executed a 5-year subscription based contract for Evidencecom at a cost of $1.9 million, and received 525 ?illy discounted Axon Flex cameras. ('in ()l'lice of Internal Audit 3 Special Audit TASER International Body-Wom Camera Procurements 14-10? April 8, 2015 The following ?ndings concern areas that GM believes could be improved by the implementation of the related recommendations. 1. APD SHOULD ENSURE ALL PURCHASES AND PROCUREMENTS COMPLY WITH CITY RULES AND REGULATIONS. On March 27, 2013, APD purchased 75 Axon Fiex cameras and Evidencecom services from TASER for a ?pilot test.? The purchase was made by issuing 3 CR0 against a sole- source contract that was speci?cally designated for electronic control devices, and ancillary products and accessories. The Pilot Purchase did not comply with the City?s competitive procurement process, but it was used as the basis for justifying the non- competitive $1.9 million OEP Purchase of Evidencecom and Axon Flex cameras on September 30, 2013. The APD Lieutenant who authorized the payment of the Pilot Purchase did not have the delegated authority to approve the purchase. Payments must be authorized by Department Directors unless signature authority has been delegated in compliance with Administrative Instruction APD personnel bypassed purchasing regulations and approvals and compromised the integrity of the procurement process. They neglected their responsibilities as government employees to determine the department?s speci?c needs and then initiate a competitive procurement process to get the best product at the lowest price. Compliance With Purchasing Regulations Two required approvals for Pilot Purchase were not obtained. By issuing a CRO against an existing contract, APD avoided the review and approval by the City?s Chief Procurement Of?cer and the Office of Management and Budget. According to the Chief Procurement Of?cer, this method of procurement would not have been approved. The sole-source contract with TAS ER for electronic control devices and ancillary products and accessories did not included Axon Flex cameras or Evidencecom. The Axon Flex cameras were not listed in the contract pricing list nor were the cameras ancillary to the products in the contract. According to the City?s Chief Procurement O?icer, the Department of Finance and Administrative Services (DFAS) - Purchasing Division staff reviewed the sole?source electronic control procurement ?le and determined that the Senior Buyer assigned to APD did not follow the procedures for extending the contract l. 'in oi' 013'ti of Internal Alain 4 Special Audit TASER lntemational Body-Wom Camera Procurements 14-10? April 8, 2015 and adding ancillary items. The Chief Procurement Of?cer should have been noti?ed of and approved the addition. The Chief Procurement Of?cer stated, fact, Purchasing management never saw the unauthorized changes made to the Procurement Contract and did not know the Senior Buyer even signed the [amended electronic control device and ancillary products and accessories] Procurement Contract. In this situation, the Senior Buyerfailed to follow standard Purchasing Division Ojj?ice policies and procedures. Impartial Emnlovee Responsibilities Beginning in January 2012, APD had an embedded Senior Buyer in the Department. In theory, the Senior Buyer was supposed to perform the oversight functions of a DFAS- Purchasing Senior Buyer, and was responsible for ensuring APD complied with City procurement regulations. In practice, the Senior Buyer was an APD staflc member who provided procurement services and guidance for the Department. The Senior Buyer?s annual performance evaluations were completed by Fiscal Manager. The Senior Buyer performed under an unclear management structure. This structure may have created unnecessary pressure for the Senior Buyer to perform as an employee of APD, rather than enforce City purchasing regulations. Senior Buyer resigned on November 29, 2014. Emails show that Fiscal Manager and Senior Buyer knew they were not complying with the City?s purchasing regulations. Below are excerpts from the APD Fiscal Manager?s and Senior Buyer?s emails related to the Pilot Purchase. I Fiscal Manager The City has a loophole, in that there are no internal controls for vert?ing that product purchased from an existing contract instead ofa resolution have gone through TRC the City ?s Technical Review Committee]. Get me a quote and I can get you a CRO. Ifyou read the contract, it is not specific to their TASER products. It is specific to TASER International ?s law enforcement pricing schedules which within guidelines, they can amend on request. In theory, it should probably still go through RC before we order the product since it is going through our system, but we should be able to bypass the other DFAS processes this time. (I it}: nl~ t\Himguett'luc. )Illt?e of Internal Audit Special Audit TASER International Body-Worn Camera Procurements April 8, 2015 14?10? I Senior Buyer An email from Senior Buyer to Fiscal Manager stated ?As long as this is covered on the Law Enforcement Pricing Schedule, you can just do a CRO (when, if there ?s a purchase). Senior Buyer was noti?ed by DFAS-Purchasing staff that products outside the original pricing schedule must be reviewed and approved by DFAS-Purchasing prior to the purchase. Senior Buyer sent an email to Fiscal Manager that stated, DFAS-Purchasing staff ?toid me something I didn?t know; if TRC approval is required for purchase, you can?t do a CRO, it must be sent to Purchasing for a P0. The Chief Procurement Of?cer stated, that the excerpts of the Fiscal Manager?s e-mails ?do suggest that APD was trying to circumvent the Purchasing process.? Chapter 22 Section 2.1 of the City's Purchasing Rules and Regulations states: Public employees must discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public con?dence in the integrity of the City procurement organization. RECOMMENDATIONS The Chief Administrative Officer (CAO) should: Direct the Human Resources (HRD) to revise the reporting structure for any Senior Buyers currently embedded in departments and have them report exclusively to the Chief Procurement Of?cer. Also, if other internal service personnel are required to spend the majority of their time in user departments, they should be direct reports to the Director of the internal service department, not the user department. APD should: Inform Administrative staff that as a condition of employment, employees are required to comply with all relevant laws, statutes, ordinances, and regulations and any violations will be grounds for disciplinary action including, but not limited to termination, demotion, suspension or reprimand. Review the effectiveness of internal controls for payment authorization and ensure only individuals with proper signature authority approve APD payments. Review documentation associated with Pilot Purchase to determine if the staff members? actions warrant disciplinary action. in Itlirc cl [nlm'nal (3 Special Audit TAS ER International Body-Worn Camera Procurements 14-107 April 8., 2015 RESPONSE FROM CAO: ESTIMATED COMPLETION DATE: RESPONSE ROM APD: ESTIMATED COMPLETION DATE: 2. APD AND SHOULD ENSURE CONTRACT CLAUSES TO LIMIT RISK AND ALLOW INDEPENDENT OVERSIGHT ARE INCLUDED IN ALL CITY CONTRACTS. By signing TASER Intemational?s service contract for the City?s $1.9 million OEP Purchase of Evidencecom and Axon Flex cameras, ?ve standard clauses that limit risk to the City and allow independent contract oversight were excluded. As a result, the City may be exposed to unmitigated vendor risk and may have dif?culty exercising the City?s contract oversight responsibilities. The five excluded clauses are outlined in the table below. ('ily- ol' Allmquerque )l?i'iee ol' Internal Audit 7 Special Audit TASER International Body?Worn Camera Procurements April 8, 2015 Clause Insurance Compliance with Laws Appropriations Of?ce of Internal Audit Office of Inspector General Relevance Limits risk to the City by ensuring the vendor maintains applicable insurance at speci?c amounts for the term of the contract. Unforeseen events may limit the ability of the vendor to continue business or adversely affect City operations if the vendor is not able to ful?ll its contractual obligations. limits risk to the City by ensuring the vendor is aware that it must with applicable Federal, State and City laws and regulations. Limits risk to the City by ensuring the contract can be terminated if funding is not available and appropriated by the governing body of the City. Ensures proper oversight and access to vendor inlormation by the Of?ce of Internal Audit. ifwarranted. Ensures proper oversight and access to vendor information by the Of?ce of Inspector General, if warranted. .Section of 14-107 Excluded Clauses from TASER $1.9 Million Contract Mandated Contract Clause The City?s Chief Procurement Of?cer stated that an Insurance clause should always be included in all City contracts. The City?s Management Division stated that the contract should now include Cyber Liability Insurance between $1 million and $5 miliion. The City's Chief Procurement Of?cer stated that a Compliance with Laws clause should always be included in all City contracts. Chapter Section 7.1.4 of the Purchasing Rules and Regulations states that the Purchasing Division is responsible for ensuring all contractual agreements which exceed one year will include provisions allowing the City to terminate the contract in the event of non-appropriation of funding. Section 2-iti-l?tB} ol' the Accountability in Government Ordinance states that every ('ity contract shall contain a statement that the individualr?vendm' understands and will abide by all provisions of the Accuuntal?nility in Government Ordinance. the Inspector General Ordinance states that every City contract shall contain a statement that the individualivendor understands and will abide by all provisions of the Inspector General Ordinance. . Although the contract is valid, the above clauses could reduce the City?s risk. The reviews by Senior Buyer and the City?s previous Assistant City Attorney assigned to DFAS-Purchasing did not detect the absence of the City?s standard contract clauses. To determine standard method of contracting, contract documentation was requested from five other cities that purchased similar products and services from TASER. The general criteria used for the comparison were large camera purchases with associated subscriptions to Evidencecom. Unlike Albuquerque's contract, all the other cities? contracts contain insurance clauses that require TASER to maintain speci?ed coverage and amounts throughout the life of the contract. Two of the ?ve cities used internal city contracts and one inserted that city?s standard city language into TASER's service contract. it} til Uttice Ht internal Audit 8 Special Audit TASER International Body-Wom Camera Procurements 14-107 April 8, 2015 In addition, the two cities that used internal city contracts included extensive language to limit risk and improve oversight. For example, the contracts not only contain comprehensive insurance and audit clauses but also include camera and software speci?cations that must be maintained by the vendor. RECOMMENDATIONS: APD should: - Amend the TASER OEP Purchase contract to include Insurance, Compliance with Laws, Appropriation, Internal Audit, and Inspector General clauses. 0 Work with the City?s Management Division and Legal Department to determine the appropriate types and coverage amounts of insurance that must be maintained by TASER for the duration of the contract term. 0 Ensure the City is named as an additional insured on all applicable insurance policies, such as Cyber Insurance. RESPONSE FROM APD: ESTIMATED COMPLETION DATE: 3. THE FORMER POLICE CONTRACT WITH TASER IS NOT CONSISTENT WITH CITY REGULATIONS. Former Chief became a contractor for TASER in October 2013, while still technically employed by the City. According to Chief Operating Of?cer, the Former Chief is paid $1,000 per day plus expenses as a consultant who attends and presents at events and promotes TASER products. The Former Chief also continued to represent TASER as a contractor for more than a year since his retirement. Former Chief entered into early retirement on September 7, 2013. Early retirement allows City employees to use accrued vacation and sick leave to extend their employment with the City for the purpose of additional service credit toward retirement, until the accrued leave balance is zero or until an earlier speci?ed date. During early retirement, the Former Chief retained his title and continued as a participant in the City?s insurance program. His of?cial retirement dateflast day of work was December 31, 2013. The Former Chief began presenting on behalf of TASER in October 2013 and had ?bar- ily ni' Office-ml Special Audit TASER International Body-Worn Camera Procurements 14-10?' April 8, 2015 performed 12 presentations as of July 2014. The Former Chief received payment for the performance of the presentations, and TASER paid for his airfare/travel, foodfbeverage, and lodging. The graph below illustrates the Former Chief?s contractual performance from October 2013 to July 2014. President and General Counsel provided the information. Presentation 1 . Presentation 3 Presentation 5 Presentation 7 Presentation 9 Presentation 11 - October 2013 a November 2013 a March 2014 - April 2014 - June 2014 a June 2(114 - Philadelphia. . - United Kingdom Scottsdale,AZ - Soottsdale,AZ Scottsdale,AZ Amsterdam PA I October 2013 December 2013 I January 2014 July 2014 (Early Retirement) {Ollicialhr Retired) Presentation 2 Presentation 4 Presentation 6 Presentation 3 Presentation 10 Presentation 12 a November 2013 February 2014 . March 2M4 . May 2014 . June 2014 . July 2014 - Mexico City 0 United Kingdom - Australia 0 Brazil . Yonkers, NY - Miami. FL The Former Chief was not available for an interview to con?rm the terms of the contract and other information. The Former Chief?s attorney stated, ?Until the investigation [by the New Mexico Attorney General?s Of?ce] is completed, I have directed [the Former Chief] to decline addressing all inquiries about the TASER contract. My advice includes any questions which the Of?ce of Inapector General and Of?ce of Internal Audit seek to ask.? It appears that APD committed to equipping a majority of APD Of?cers with the Axon Flex cameras from TASER before the pilot test of the 75 cameras, which were purchased March 27', 2013. A history of the implementation of body-worn cameras at APD, which was prepared by one of the of?cers involved in testing and implementation, includes the statement: ?November 19, 2012 the Chief asks for a roadmap to implement TASER Axon Flex by February 15, 2013.? According to APD personnel, the Former Chief wanted to be on top of the ?next big thing in law enforcemen He preferred to be on the cutting edge rather than a follower. According to Chief Operating Of?cer, ?his [the Former Chief?s] perspective as a very early adopter and user of many technologies uniquely quali?ed him to talk to agencies about how to avoid the mistakes he had made in creating the world?s largest deployment of cit-of?cer video.? There are risks associated with early adoption of new technology, and accepting ll} Hi. (. ill" Internal Audit 10 Special Audit - TASER International Body-Worn Camera Procurements 14-10? April 3, 2015 those risks may not be in the best interest of the City and the taxpayers. City regulations prohibit a former employee from representing any former vendor for one year after their termination date. Section ROA 1994 states former employee shall not within one year after the date of termination from employment represent any person or business in connection with a matter in which the former employee has performed an of?cial act, unless the Chief Administrative Of?cer consents to such representation.? The Former Chief directed and authorized APD staff to proceed with the Department?s testing and procurement of Axon Flex cameras and Evidencecom services. The Former Chief did not request or receive consent from the City?s Chief Administrative Officer for his contractual relationship with TASER during his early retirement or after his of?cial retirement date. Direct or indirect con?icts of interests diminish the perceived integrity of public of?cials and employees, and do not promote con?dence and trust in City operations. This blemished perception may lead the public and other stakeholders to believe that independent and impartial decisions may not be made in the best interest of the people, community or government as described by Article XII, Con?ict ofIntaresr Declaration of Policy of the City?s Charter. RECOMMENDATIONS: The CAO Should: a Direct HRD to revise retirement documents to include information explaining the prohibition against representing any person or business in connection with a matter in which a former employee performed an of?cial act, unless the Chief Administrative Of?cer consents to such representation. RESPONSE FROM CAO: ESTIMATED COMPLETION DATE: 4. APD PERSONNEL SHOULD COMPLY WITH CITY CONFLICT OF INTEREST REGULATIONS. APD personnel accepted various forms of gratuities and solicited sponsorship donations from TASER and Lead Sales Executive for APD, both of which con?ict with a -A0 - f?T? ?Orr?. - .1 Cit} ofAllun'lum'tpw. )l'ficc'nl? Internal Mull! 11 Special Audit TASER international Body-Worn Camera Procurements 14-107r April 8, 2015 City regulations. Seven APD employees and one contracted staff member accepted some form of gratuity?es) from TASER. APD personnel with direct involvement with the Department?s body-worn camera testing or procurements accepted various forms of gratuities such as airfareftravel, foodfbeverage, and entertainment. Speci?c examples of gratuities accepted by APD employees are outlined below: I Albuquerque Dinner - On October 30, 2013, APD staff and guests attended a dinner with TASER representatives. TASER paid $1,350 for the dinner at a fine dining restaurant. Records indicate that two Of?cers, two Evidence Technicians, and one APD Contracted Employee attended the dinner. Some APD employees? spouses may have also attended. - TASER Visits and Lunches From September 2012 to September 2013 (Main timeframe for testing, implementation and contract completion for TASER products) Lead Sales Executive visited APD at least two times per month and routinely purchased lunch for two APD Of?cers. TASER staff stated the typical cost of the lunches was $20-$25. 0 All-Expense Paid Training Session In January 2013, two APD employees accepted all-expense paid training from TASER International. Airfare, foodfbeverage and lodging were paid by TASER on behalf of the APD employees. Monetary values for all gratuities could not be determined because extensive research and time would be needed to derive the value and would not offset the bene?t of determining the associated value. Donation Solicitation APD employees solicited sponsorship donations from TASER in support of Ski Team. Email indicates that Lead Sales Executive for APD made a personal donation of $1,000. TASER also donated $500 to Ski Team. APD employees stated various reasons for accepting TASER gratuities. When asked about TASER paying for meals, one APD employee described it as ?business as usual.? Other primary reasons given for accepting gratuities from TAS ER included: 0 Received directive to attend TASER events, a: Thought training was a part of body-worn camera contract, and a Do not believe a gratuity was accepted. APD employees? acceptance of meals, travelflodging and other paid expenses may diminish the public?s trust in government operations and are not consistent with Article XII, Conflict of Interest Declaration of Policy of the City?s Charter, which states: n?t 41 (ill HI Milieu ml Internal Audit 12 Special Audit TASER lntemational Body-Worn Camera Procurements 14-10? April 8, 2015 The proper administration of democratic government requires that public of?cials be independent, impartial, and responsible to the people; that government decisions and policy be made in the best interest of the people, the community and the government; and that the public have con?dence in the integrity of its government. In recognition of these goals, the following Code of Ethics shall apply to all of?cials of the city. Accepting meals or other gratuities from a current or potential vendor by any employee is not consistent with City of Albuquerque Administrative Instruction No. 3-12, Section which states, ?It is prohibited to accept at a suppliers expense travel, accommodations, meals and all other gratuities.? RECOMMENDATIONS: APD should: 0 Ensure all Departmental staff is informed of the City?s con?ict of interest regulations, that: Prohibit the acceptance of any gift (meals, foodfbeverage, travel/airfare), reward, fever or all other gratuities from any vendor, contractor, individual or ?rm doing business or planning to do business with the City. The CAO should: I: Consider issuing a stand-alone Code of Conduct document to every City employee emphasizing important policies, including unallowable activities as acceptance of meals and gifts from vendors. I Create a Citywide con?ict of interest reporting form. The form should include all applicable citations from State and City regulations and give clear and understandable examples of each regulation. The form should provide space for reporting potential con?icts of interest and be acknowledged and signed by all City personnel, and retained in each employee?s HRD personnel ?le on an annual basis. a Work with DFAS-Purchasing to create and distribute a vendor code of conduct to communicate City policies that apply to vendors, including the prohibition against purchasing meals or other items for the bene?t of City employees. RESPONSE FROM APD: ESTIMATED COMPLETION DATE: v-?H - Ht nl~ Internal Audit 13 Special Audit TASER International Body-Worn Camera Procurements 14-10? April 8, 2015 RESPONSE FROM CAO: ESTIMATED COMPLETION DATE: 5. APD SHOULD ENSURE PRORATION CHARGES FOR OVERLAPPING PURCHASES ARE PROPERLY APPLIED AND RECEIVED. Pilot Purchase agreement on March 27, 2013, included one year of Evidencecorn at no charge. However, when APD approved the OEP Purchase of Evidencecom, TASER included charges for Evidencecorn for the 75 Axon Flex cameras from the Pilot Purchase. Evidencecom service charges should have been prorated because the dates of the agreements overlapped. The effective date for annual renewal of Evidencecom began on August 15, 2013 and occurs on August 15 thereafter. As a result, APD was overcharged $25,243 for Evidencecom service from August 15, 2013 to March 27, 2014 for the overlap period illustrated below. Overlapping Evidence.eom Services Evidence corn at no char 2 math 2013 2014 August . . . . August . 2013 Idence corn Paid 2014 overchargi- In: Overlapping Evidencemnn Sea-x i015 i . .\nnual 1 Purchase I "up. . I'fil'?lt'tl Insult-natural? I ha rgev I l'Llot l?urcimw . a: 13 j?ll('harut- Dates . (hen-han lac I llzn?ues I I (ll 1' ner.? we . 17 (?ity ol ()ll?ice 01 Internal Audit 14' Special Audit TASER International Body-Worn Camera Procurements 14-10? April 8, 2015 RECOMMENDATIONS: APD should: a Request a refund of $25,243 from TASER. RESPONSE FROM APD: ESTIMATED COMPLETION DATE: 6. DFAS-PURCHASING SHOULD DEVELOP POLICIES AND PROCEDURES FOR IDENTIFYING POTENTIAL VENDORS AND CONDUCTING PILOT PROGRAMS. The City has not developed policies, procedures or retention requirements for testing new products and conducting pilot programs. The City also has no requirements for allowing more than one vendor to provide items for testing, nor are there any documentation requirements for recording the results of pilot programs. APD staff stated that the Department tested cameras from other vendors such as VieVu, Scorpion, GoPro, and Wolfcom, but determined that TASER was the best ?t for APD. APD personnel informed DFAS-Purchasing that body?worn camera products and services would bene?t the Department and interactions with judicial agencies by allowing timely access to APD evidence recordings. APD personnel also stated that Axon Flex camera is superior to the Department?s previous Scorpion cameras. However, APD did not provide DFAS-Purchasing any documents to support the statements. APD maintained minimal documentation to support the conclusions of the Department?s body-wom camera evaluation activities. Staff responsible for the evaluation and testing of TASER pilot program stated that program performance feedback was ?mostly verbal." The limited supporting documentation that was retained did not provide comparison or evaluation data between TASER and other body-worn camera vendors. In addition, APD did not develop criteria or standard speci?cations for the Department?s ideal body?worn camera or video management solution. As a result, OIA could not validate that TASER was the best product for APD. When asked why APD did not procure the cameras through a competitive procurement process, Fiscal Manager stated that he wasn?t aware of any other comparable hwy- w-wr-n m- it}? Utticc?ot Internal ml 15 Special Audit - TASER International Body-Wom Camera Procurements 14-10? April 8. 2015 products at the time. However, the Department of Homeland Security (DHS) issued a report titled Wearable Camera Systems in March 2012. The report included ratings of ?ve cameras and their storage and retrieval systems. The Department of Justice (130]) issued A Primer on Body-Worn Cameras For Law Enforcement in September 2012. The report provided information on types of body?worn cameras, recommended product selection criteria, and discussed implementation issues including the need for policies and procedures, and data storage and management considerations. It also included an appendix describing the Speci?cations for seven different body-worn cameras. Section ROA 1994, allows departments to purchase ?goods or services for a reasonable trial period for testing purposes as approved by the City Purchasing Of?cer; on the condition that if additional purchases are required after testing, such goods or services shall be subject to the requirements of this article.? After the test phase is complete, the subsequent purchase must comply with the City?s procurement code and be competitively bid if other vendors produce similar products. City Ordinance 5-5?30 ROA 1994 COMPETITIVE SEALED PROPOSALS, states: (A) Competitive sealed proposals may be used for the purchase of goods, [when] the use of proposals would promote innovation, state of the art technology and overall ef?ciencies to the bene?t of the city; or the evaluation of responsive offers depends on levels of performance, expertise, ?nancial capability or other criteria and not price alone. RECOMMENDATION S: The CAO should: 0 Direct DFAS-Purchasing to develop citywide policies and procedures for testing products and conducting pilot programs to ensure the City is purchasing the best product at the best price. At a minimum the policies and procedures should address equal opportunities for vendor participation, testing timeframes, compliance with applicable procurement regulations, and requirements for documenting and retaining the results and conclusions of pilot programs. 0 Remind City department directors that they must comply with City Ordinances when procuring any goods or services, to ensure that the use of taxpayer funds is in the best interest of the City and the taxpayers. - uv . u?w t'Hj.? (at I Hlire Internal Audit 1r, Special Audit TASER International Body?Wom Camera Procurements 14-10? April 8, 2015 RESPONSE FROM CAO: ESTIMATED COMPLETION DATE: Pilot Purchase did not comply with the City?s competitive procurement process, and was used as the basis for justifying the $1.9 million non?competitive OEP Purchase of Evidencecom and Axon Flex cameras. APD personnel bypassed purchasing regulations and approvals and compromised the integrity of the procurement process. By signing TASER's service contract for the City?s $1.9 million OEP Purchase, ?ve standard clauses that limit risk to the City and allow independent contract oversight are absent from the contract. The actions of Former Chief of Police and persoonel to engage in a contractual relationship and accept gratuities from TASER are not consistent with City con?ict of interest regulations. Direct or indirect con?icts of interests diminish the perceived integrity of public of?cials and employees, and do not promote con?dence and trust in City operations. APD was charged $25,243 for overlapping Evidencecom service associated with the Pilot Purchase from August 15, 2013 to March 27, 2014 and should request a refund from TASER. The City has an opportunity to strengthen its controls over procurements and educate both City employees and vendors on the City?s purchasing and con?ict of interest regulations. Educating employees and vendors should increase awareness and compliance with City regulations. We greatly appreciate the assistance and cooperation of the personnel in the Albuquerque Police Department, DFAS-Purchasing Division, TASER International, and other cities who took the time to respond to our requests. gong- 1? -w-er a-n-u -v 1? 7 Hi Hillel? ol' Internal Audit 17. Special Audit TAS ER International Body-Won?t Camera Proourements 14-107 April 8, 2015 Internal Audit Manager REVIEWED and APPROVED: APPROVED FOR PUBLICATION: Debra Yoshimura, CPA, CIA, CGAP, CICA Chairperson, Accountability in Director, Of?ce of Internal Audit Government Oversight Committee Cit)? ofAllmquerqlw. Of?ce at Internal Audit 18 a Special Audit A TASER International Body-Wom Camera Procurements 14-107 April 8, 2015 APPENDIX A The audit objectives are: I Did the APD use the proper procurement method for the TASER International body-worn contracts? 0 Were the TASER International body-worn camera contracts properly authorized and approved? Did APD violate ethics or con?ict of interest regulations concerning the TASER International body-worn camera contracts? a What are the risks associated with using TASER International?s bodyworn camera service contract vs. the City?s standard contract? Our audit did not include an examination of all functions and activities related to the City?s procurements of body?worn cameras from TASER International. Our scepe was limited to the objectives above. This report and its conclusions are based on information taken from a sample of transactions and do not represent an examination of all related transactions and activities. The audit report is based on our examinatioo of activities through the completion of ?eldwork on March 23, 2015 and does not re?ect events or accounting entries after that date. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain suf?cient, appropriate evidence to provide a reasonable basis for our ?ndings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our ?ndings and conclusions based on our audit objectives. Methodologies used to accomplish the audit objectives include but are not limited to the following. 0 Gather and review background information, internal control documentation, contracts, ity of Allmquerquc. If )t?l?ice ol Internal Audit 7 Special Audit TASER International Body-Worn Camera Procurements 14-10? April 8, 2015 and APD policies and procedures pertaining to TASER body-worn camera procurements. I Review City Ordinances, Administrative Instructions, and other regulatory information pertaining to TASER procurements. I Interview APD staff and management to gain a better understanding of the Department?s operations, procedures and need for body?worn camera products. I Obtain contract documents from other cities that have purchased similar quantities of body-worn cameras and subscription services (Evidencecom) from TASER. I Review over 3,000 emails to determine if efforts were made to circumvent the City?s competitive procurement process. I Review all supporting documentation to verify how APD concluded that bodyu worn camera products were the best fit for the Department. or Jtlicc of Internal Audit 20