A Follow-up Audit Report on Workforce Management, Procurement, and Lotto Texas Activities at the Texas Lottery Commission
February 2008
Report Number 08-022
Overall Conclusion
The Texas Lottery Commission (Agency) has fully or substantially implemented the majority of prior State Auditor's Office recommendations regarding workforce management, procurement, and Lotto Texas activities. Specifically, of the 34 high-risk recommendations selected for follow-up audit work:
- The Agency has fully implemented 11 of 13 (85 percent) recommendations for workforce management.
- The Agency has fully or substantially implemented 10 of 12 (83 percent) recommendations for procurement.
- The Agency has fully implemented 8 of 9 (89 percent) recommendations for Lotto Texas activities.
While the Agency has made progress in implementing most of the prior audit recommendations, it should continue its efforts to strengthen workforce management and procurement activities. For example:
- Although the Agency has a process for addressing formal complaints made through its Human Resources Division, it does not have a process to address informal employee complaints made to its ombudsman, managers or division directors, and internal audit. It also does not ensure that it communicates complaint resolutions to all interested parties. In addition, the Agency lacks formal policies and procedures for the ombudsman position it created in 2006. Additionally, the Agency's ombudsman does not have a formal role in the employee complaint process.
- Results of an Agency-wide survey the State Auditor's Office conducted in 2007 indicate that Agency staff believe that some key aspects of employee relations have improved significantly since the State Auditor's Office conducted a similar survey in February 2006. For example, in 2007, 70 percent of employees agreed that they were treated with respect and dignity, compared with 55 percent in 2006. At the same time, responses and employee comments indicate that employees continue to have concerns about key aspects of the work environment, including a fear of retaliation. In 2007, 44 percent of employees agreed that they will not be retaliated against if they raise issues or concerns; in 2006, 38 percent of employees agreed with that statement.
- Weaknesses in the Agency's policies and procedures for negotiating contracts increase the risk that the most favorable terms and conditions may not be obtained. In addition, the Agency should address weaknesses that remain in its monitoring of the primary lottery operator. A third-party reviewer contracts with the primary lottery operator, rather than directly with the Agency, to monitor the primary lottery operator's contract compliance. Therefore, the third-party reviewer may appear to lack independence from the primary lottery operator. This may impair the third-party reviewer's ability to ensure that it conducts its reviews in the best interests of the Agency.
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