"All contracts of the sheriff's office shall be in writing and shall require approval as to form by Law and approval as to the availability of appropriated funds by Finance," the memorandum states.
Nutter's chief of staff, Everett Gillison, who drafted the agreement, said this week that it means what it says: " 'All contracts' is all contracts."
The 14 contracts reviewed by The Inquirer were one-page documents with brief descriptions of the work to be done and the amount of payment. None of the contracts was on an official letterhead or form, nor was any approved by city officials outside the Sheriff's Office.
The contracts were not listed on any of the city's websites or in quarterly or annual contract reports, as required by the City Code.
The Sheriff's Office noted that two major contracts worth nearly $600,000 awarded since the 2012 agreement did go through the regular bidding and approval process.
It's unclear whether contracts in addition to the 14 were awarded without required approvals. Williams' office has not responded to a request for copies of all existing contracts.
The 2012 agreement was designed to provide more transparency and fiscal oversight of the Sheriff's Office after a scathing forensic audit of Williams' predecessor, John Green, commissioned by the City Controller's Office in 2011, showed mishandling of funds.
While the operations of the Sheriff's Office have improved, Gillison said, the office is "not in total conformity in what we want."
"We would like to see [a contract] up front" and not in an audit, Gillison said.
Asked why it has taken the office more than two years to implement a policy that all contracts need to be approved by the city Law Department, Gillison defended Williams.
"Rome was not built in a day," he said. "It's a massive undertaking. I think he's made a Herculean effort."
City Controller Alan Butkovitz recently examined compliance with the 2012 agreement, and he said the audit "raises questions on both parties' roles in the" memorandum of understanding.
Williams is scheduled to meet with the controller's office Friday to challenge any of its findings before the final audit report is released next week.
Butkovitz declined to comment on the specifics of his findings.
Williams, a Democratic ward leader in North Philadelphia, ran courtroom operations for the Sheriff's Office in the 1990s before winning election to the state House in 2000. He was elected sheriff in 2011 and oversees more than 280 employees.
The Sheriff's Office transports prisoners and provides courtroom security, but its biggest job is managing foreclosure and tax sales.
Williams did not respond to requests for comment about the contracts. Undersheriff Joseph Vignola, a former city controller and veteran Philadelphia politician, said the memorandum of understanding has been followed.
"All major contracts have been through Law and Finance Departments," Vignola said, "and they have been competitively bid."
He pointed to two contracts - with Isdaner & Co. for $8,000 monthly for accounting services, and with TeleoSoft for $533,500 for a new computer system - signed since the agreement that were put out to bid and have been registered in the city's contract-information system.
Vignola said there was no trace of the 14 smaller contracts in city records because the Sheriff's Office was paying for those contracts with new fees from mortgage-foreclosure sales and not using general-appropriation funds. Gillison said he disagreed with that rationale.
Both their offices are in weekly communication, and Vignola said the Finance Department was kept in the loop on all contracts.
Among the unapproved contracts awarded by Williams:
Former Acting Sheriff Barbara Deeley was hired for four months last year, at a cost of $30,000, to "advise and explain the operations of the office" before Dec. 31, 2010.
Alan Kurtz, a retired Philadelphia police captain, who ran unsuccessfully for the Democratic nomination for sheriff in 2010, was given two contracts by Williams' office in 2012.
One paid Kurtz $15,000 for two months of "analysis of procedures and the retention and distribution of funds post Sheriff Sales" in the summer of 2012. The other paid Kurtz $29,900, just below the bidding threshold of $30,000 at the time. The contract renewal did not specify the work to be done.
Kurtz, whom Vignola said was still working for the Sheriff's Office, made one $250 donation in September to Citizens for Jewell Williams.
Bruce Charles Williams, son of a North Philadelphia doctor by the same name, was hired for three months in March 2013 for $15,000 to help in the sheriff's real estate division. Bruce Williams, who according to Vignola is not related to the sheriff, is still working as a contractor for the office. In September, Bruce Williams contributed $250 to Citizens for Jewell Williams. He also contributed to Williams' campaign in 2008.
Joshua Wigfall was hired for three months last year to "perform clerical duties assigned to him in the Sheriff's Civil Enforcement Unit," according to the one-line contract description. His $15,000 contract has been renewed, and he is still working in the office. Wigfall donated $125 in September to Citizens for Jewell Williams.
Leonard Heard, a former William Penn High School principal, was the point person for a $29,900 three-month contract signed with the Communities-in-Schools nonprofit in 2012. Heard made a $250 donation to Williams' campaign in 2011.
Although the contributions were far below the city's $2,600 "pay-to-play" limit on political donations for those seeking noncompetitively bid contracts, Ellen Kaplan, of the government watchdog group Committee of Seventy, said the contracts and contributions were the "kind of [thing] that make people very cynical about government."
Vignola said there was no connection between the contributions and the contracts.
"It's qualifications first," he said.
Vignola said he also has donated to Williams - at least $200 every year since he was hired, according to campaign records.