A Summary of Results from Contracting Audits

Audit Reports by Contracting Phase

The chart below shows the number of SAO audit reports released from March 2016 through June 2023 that contained contracting results by contracting phase. As SAO audits often address many phases of the contracting cycle, a report could be captured in multiple phases in the chart below. The Management and Oversight phase was addressed most frequently in SAO audit reports. Click on the contracting phase for additional information.

Issue Ratings in Contracting Audit Reports

The chart below shows the significance of the results reported in SAO contracting audits released from March 2016 through June 2023. As indicated below, the most common issue rating in SAO contracting audit reports was medium. Individual results contribute to the overall chapter/sub-chapter issue ratings in each audit report. See the Issue Ratings section for a description of each rating.

Click on each issue rating category below to view the applicable chapter(s)/sub-chapter(s) in the corresponding audit reports by state entity.

Audit Reports by Contracting Phase and Issue Rating

The chart below shows the number of SAO audits released from March 2016 through June 2023 that reported results by phase of the contracting cycle and captures the significance of those results by issue rating. SAO audits often address many phases of the contracting cycle and report results across the ratings scale; as a result, a report and rating could be captured in multiple phases in the chart below. The planning and vendor selection phases had the most significant (priority rated) issues. Priority rated issues if not addressed could critically affect the state entity’s ability to effectively administer the function audited.

Training and Certification

Ensuring that contract and purchasing staff and members of the governing body, if applicable, are adequately trained, qualified, and/or certified to complete their responsibilities related to the contract.

Required Planning and Documentation

Conducting the required planning steps, including a needs assessment and cost estimate.

Other

Complying with additional requirements, such as ensuring that policies and procedures to guide the state entity’s activities during the planning phase are in place and align with the State of Texas Procurement and Contract Management Guide.

Solicitation Process

Selecting the appropriate procurement method, such as a request for proposal or invitation for bids, advertising the solicitation, and public bid opening, if applicable.

Statement of Work

Developing key solicitation documentation and a clearly defined statement of work. This should include contractor qualifications, proposal submission requirements, methods for monitoring contractor performance, and criteria for determining satisfactory contract completion.

Other

Complying with additional requirements, such as ensuring that policies and procedures to guide the state entity’s activities during the procurement phase are in place and align with the State of Texas Procurement and Contract Management Guide.

Evaluation and Scoring

Ensuring that scoring criteria is consistently applied and scores are accurately tabulated during the evaluation process.

Conflicts of Interest and Other Required Disclosures

Ensuring that the state entity’s purchasing and contract management personnel, the bid evaluation team, and the vendor complete conflict of interest and other required disclosures.

Non-scored and Non-competitive

Ensuring that contracts exempt from competitive bidding, such as emergency purchases and if the agency received only one bid in response to the bid solicitation, comply with applicable requirements.

Other

Complying with additional requirements, such as ensuring that policies and procedures to guide the state entity’s activities during the vendor selection phase are in place and align with the State of Texas Procurement and Contract Management Guide.

Contract Terms

Including key contract elements, such as a scope of work, defined deliverables, dispute resolution, price, right to audit, specifications, and indemnification.

Contract Execution

Ensuring the contract is reviewed by appropriate personnel.

Reporting

Complying with requirements related to contract notification and reporting to the Legislative Budget Board and other oversight entities and posting contract information on the state entity’s Web site, if applicable.

Contract Amendments and Changes

Having a formal contract amendment or change management process to ensure that amendments receive proper approval, changes are within the scope of the solicitation, and changes are initiated by appropriate personnel.

Other

Complying with additional requirements, such as ensuring that policies and procedures to guide the state entity’s activities during the formation phase are in place and align with the State of Texas Procurement and Contract Management Guide.

Fiscal Monitoring

Ensuring that payments to the vendor are approved, timely, adequately supported, and comply with contract terms.

Performance Monitoring

Completing a monitoring risk assessment, monitoring key deliverables and performance metrics, and requiring corrective action, when necessary.

Vendor Performance Reporting

Reporting vendor performance to the Comptroller, as required.

Contract Close Out

Verification that contract obligations have been met.

Other

Complying with additional requirements, such as ensuring that policies and procedures to guide the state entity’s activities during the management and oversight phase are in place and align with the State of Texas Procurement and Contract Management Guide.

Managed Care Organization

Audit reports of the Health and Human Services Commission’s contracts with managed care organizations (MCOs) and audits of MCO vendors. The SAO has conducted a series of MCO-related audits and identified these separately due to their unique design, complexity, and approach.

Other

Additional requirements that are not addressed in the contracting phases above.