A Performance Audit
An Audit Report on Selected Texas Education Agency Contracts and Grant with Education Service Centers
The Texas Education Agency (Agency) should improve its contract procurement and formation processes and strengthen its oversight of selected contracts and grants with education service centers (ESCs) to ensure that it complies with statutes, Office of the Comptroller of Public Accounts requirements, Agency policies and procedures, and requirements in the contracts and grant agreements. Specifically, for the two contracts and one grant agreement audited, the Agency did not have an executed contract or grant agreement before it allowed the Region 13 ESC (Austin) and the Region 20 ESC (San Antonio) to begin work under those contracts and grant agreement. The execution dates for those contracts and grant agreement, and their renewals and amendments, were between 12 days and 128 days after their effective dates.
The Agency had controls and processes related to payments for the ESC contracts audited, and it made payments in a timely manner and stayed within the contract budgets. However, the Agency did not require the Region 13 ESC to submit sufficient documentation with invoices to verify that (1) the Agency had received the invoiced services and (2) the expenditures were allowable and associated with specific deliverables under the contracts.
The Agency Allowed the Region 13 ESC and the Region 20 ESC to Perform Work Without Having Executed Contracts and a Grant Agreement
The Agency did not execute the contracts for the Early College High School and Support Center programs prior to allowing the Region 13 ESC to begin work on those programs. In addition, the Agency did not have an executed grant agreement for CTEP prior to allowing the Region 20 ESC to begin the work specified in that agreement. The initial contracts and grant agreement were signed from 12 days to 97 days after their effective dates. The amendments and renewals for the contracts were signed from 20 to 128 days after their effective dates. Allowing work to proceed without an executed contract or grant agreement increases the risk that disagreements will arise regarding the scope of the work under the contract or grant agreement and could complicate the resolution of those disagreements. Additionally, allowing work to begin before there is an executed contract or grant agreement could limit the Agency’s ability to effectively monitor the programs and leaves contractors and subcontractors without adequate direction on performance and budget expectations.
The Agency had controls and processes related to payments for the ESC contracts audited, and it made payments in a timely manner and stayed within the contract budgets. However, it should require the ESCs to submit sufficient information with their invoices so that the Agency can determine whether services are received, expenditures are allowable, and invoices tie to contract tasks and deliverables.
The Agency Generally Complied with Statutes and Requirements for Contract Planning; However, It Should Strengthen Controls Over Certain Contract and Grant Procurement and Oversight Processes
The Agency planned the audited contracts in accordance with applicable statutes, rules, Office of the Comptroller of Public Accounts (Comptroller’s Office) requirements, and Agency policies and procedures. The Agency ensured that the associated statements of work contained all of the elements that the Comptroller’s Office required and that the bids were completed correctly. The Agency also completed a formal preliminary risk assessment for both contracts audited to determine the level, type, and amount of management, oversight, and resources required to plan and implement the contracts.
However, the Agency should improve certain contract and grant administration procedures related to procurement and oversight. Specifically, the Agency should improve its contract procurement process by ensuring that its purchasing staff are free of conflicts of interest and by reviewing solicitations when the Agency receives only one bid to determine whether the solicitations were overly restrictive. The Agency also should strengthen its contract and grant oversight processes by making sure it reviews documentation related to contract and grant deliverables.
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