General Government
An Audit Report on The Department of Information Resources' TexasOnline Contract
March 2002
Report Number 02-031
Overall Conclusion
The Department of Information Resources (Department) should strengthen its efforts to protect the State's financial interest in TexasOnline, the e-government Web portal for the State of Texas. Implementing a formal contract monitoring process would enable the Department to ensure that the TexasOnline contractor makes necessary adjustments to its financial reports, provides accurate and useful financial and performance information, and complies with the terms of the contract. The TexasOnline contractor provided fiscal year 2000 and 2001 financial reports to the Department that contained inaccuracies and were not as useful as they could have been. This increases the risk that the contractor could overcharge the TexasOnline project. It also could unnecessarily delay the point when the contractor recovers its investment.
Key Facts and Findings
- Expenditures on the contractor's financial reports were overstated by at
least $202,935 and possibly by as much as $436,000. Revenue was overstated
by $98,636. Before adjustments, TexasOnline state-related expenditures and
revenue since inception total $11,136,978 and $1,538,360, respectively.
- The Department must implement a formal contract monitoring process to ensure
that the TexasOnline contractor complies with the contract and the contract
renewal agreement. On February 9, 2002, the Department executed a contract
renewal agreement that addressed the contract weaknesses we identified during
our audit.
- TexasOnline software (valued at $1.1 million) may not be transferable to
the State upon termination of the TexasOnline contract without additional
cost. The contract renewal agreement gives the TexasOnline contractor an extension
until August 31, 2002, to amend the TexasOnline software licenses.
- Tests of the TexasOnline revenue process at the Real Estate Commission indicated
that revenues are processed accurately and transactions are completed successfully
for that agency.
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