A Performance Audit
An Audit Report on Selected Contracts at the Department of Public Safety
May 2016
Summary Analysis
The Department of Public Safety (Department) should strengthen its contract monitoring processes. The audit of two contracts identified the following:
Fuel card contract. The Department did not sufficiently review the invoices that the fuel card vendor submitted and, as a result, it paid the fuel card vendor $503,496 more than the invoiced amount during the scope of this audit.
In addition, the Department did not adequately monitor its employees’ use of fuel cards by reconciling charges that employees self-reported on monthly logs with available data from the fuel card vendor.
Fingerprint Applicant Services of Texas (FAST) contract. The Department complied with most requirements for planning, procuring, and forming the FAST contract with MorphoTrust, USA, LLC. In addition, the Department’s payments to the contractor were supported and properly approved. However, the Department should strengthen its monitoring to ensure that the contractor adequately protects clients’ personal information and provides quality services that are accessible across the state.
The Department did not apply rebates and credit card fraud refunds to its payments to the fuel card vendor and, therefore, it paid the fuel card vendor $503,496 more than the invoiced amount during the scope of this audit. After auditors brought this matter to its attention, the Department provided documentation indicating that it had reduced a subsequent payment to the fuel card vendor by $437,423 to begin to address that issue. The Department also incurred penalties because it did not make payments to the fuel card vendor in a timely manner. Additionally, the Department did not incorporate the results of supervisory reviews of employees’ fuel card charges into its payment process.
In addition, the Department did not adequately monitor its employees’ use of fuel cards by reconciling charges that employees self-reported on monthly logs with available data from the fuel card vendor. It also did not implement an alternative process to validate its employees’ fuel card charges before it paid the fuel card vendor’s invoices. As a result, auditors identified:
• Fuel card charges that employees did not report, including out-of-state fuel card charges that Department employees asserted they did not make.
• Instances in which fuel cards and driver identification numbers (driver IDs) were used by Department employees other than the employees to whom those fuel cards and driver IDs were assigned (including former employees).
The issues above increase the risk that the Department could pay for fuel purchases that do not support state business.
The Department complied with most applicable statutes and rules for planning, procuring, and forming its Fingerprint Applicant Services of Texas (FAST) contract.
However, auditors identified certain weaknesses in the Department’s contracting processes. Specifically, the Department did not verify that the contractor to which it awarded the contract had submitted audited financial statements with its proposal, as required by the solicitation.
In addition, the Department received only one proposal, and it did not document (1) that it had re-reviewed the solicitation for unduly restrictive requirements or (2) the feedback it had received from vendors about its proposed solicitation, as required by State of Texas Contract Management Guide.13
The Department should strengthen its monitoring of the FAST contract to ensure that the contractor adequately protects clients’ personal information, provides quality services that are accessible across the state, and complies with its HUB subcontracting plan. Not adequately monitoring the contract increases the risk that the Department may not be aware of potential contractor issues and may be unable to take corrective action when necessary.
Graphics, Media, Supporting documents