Energy provider is criticised in the US

3 June 2009

04 June 2009 | Martha McKenzie- Minifie

The president of Long Island's main electricity provider has told auditors that seeking board of trustee approval for all its procurement contracts would be "incorrect" and "counterproductive".

Kevin Law of the Long Island Power Authority (LIPA) made the comments in a letter to the New York State Office of the State Comptroller (OSC).

The OSC, which is responsible for auditing government operations, last week issued a critical audit of LIPA, with 12 recommendations to strengthen its internal controls over its core financial operations.

It found that LIPA's annual procurement report for 2007, which listed 105 contracts totaling more than $6.6 billion (£4 billion), "was not complete and was not formally approved by the board as required.

"The report does not disclose all contracts, including those which National Grid enters into on behalf of LIPA, and is not routinely approved by the board prior to submission."

Law said the procurement report was currently included in the annual report to the board of trustees "for informational purposes only". And argued there is "no state requirement" for such approval.

However, LIPA has taken steps in response to some of the audit's other suggestions. It recommended LIPA develop and communicate specific procedures to help staff comply with procurement guidelines when dealing with competitive bids, contract evaluations and proposal requests. And LIPA intends to develop operational procurement procedures.


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