Performance Audit: Arizona Department of Administration - Arizona State Purchasing Cooperative Program

The Arizona Department of Administration administers a purchasing cooperative program that allows members to purchase goods and services from state-wide contracts. Statute authorizes the Department to establish a program fee that covers the costs of administering the purchasing cooperative program. However, the program’s fee revenue has exceeded the program’s administrative costs. Not only has the Department used program fee revenue to administer the purchasing cooperative program, it has also used this revenue to pay for most of the cost of the state electronic procurement system, ProcureAZ, and to pay the salaries and benefits of more than half of the Department’s procurement staff. Therefore, the Department needs to better align the program fee with program costs. In addition, the Department needs to improve the collection of program fee revenue and continue to strengthen its cash-handling controls over the processing of program fee revenue.