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An Audit Report on Diversion Program Grants at the Texas Department of Criminal Justice

July 2019

Summary Analysis

The Texas Department of Criminal Justice’s (TDCJ) Community Justice Assistance Division (CJAD) developed processes and methodologies for evaluating, scoring, and awarding Diversion Program grants to Community Supervision and Corrections Departments (Local Departments). For example, CJAD documented a scoring methodology and criteria that evaluators were required to use when scoring program grant applications. However, CJAD should strengthen its processes to ensure that:

  • It maintains adequate support for evaluation scores.
  • It uses complete and accurate offender data to make funding decisions.
  • Individuals involved in the grant evaluation and award process sign conflicts of interest disclosures.

CJAD monitored Local Departments’ compliance with program and financial requirements of the Diversion Program. That monitoring included completing a risk assessment and conducting compliance reviews and requiring Local Departments to obtain financial opinion audits and submit quarterly financial reports. However, CJAD should strengthen its program and financial monitoring processes to help ensure Local Departments’ compliance with grant requirements by verifying that the Local Departments have adequate plans in place to monitor vendors paid with Diversion Program funds. CJAD also should monitor vendor contracts in accordance with its policies and ensure that all Diversion Program funding recipients receive adequate financial monitoring.

 Jump to Overall Conclusion

CJAD developed and implemented a process for evaluating, scoring, and awarding Diversion Program grants and ensured that process was followed for all 17 program applications tested.

CJAD also ensured that evaluators followed the scoring methodology and applied the criteria correctly for all 17 applications tested.

However, CJAD changed some of the applications’ previously determined “fiscal risk score” without documenting justification for those changes. In addition, CJAD did not ensure that it used accurate offender data for its Monthly Community Supervision Report, which CJAD used to score certain elements of Diversion Program grant applications.

Jump to Chapter 1-A 

CJAD developed an evaluation methodology and a scoring matrix for one-time funding grant applications. Between fiscal year 2018 and the second quarter of fiscal year 2019 (through February 28, 2019), CJAD evaluated 122 one-time funding grant applications from 32 Local Departments. Of the 32 grant applications that auditors tested, CJAD followed its established scoring methodology for 25 (78 percent) applications.

However, for the remaining seven grant applications tested, CJAD:

  • Did not ensure that all scorers on the evaluation committee completed the scoring matrix to evaluate one-time grant applicants for six applications.
  • Awarded a $30,000 one-time grant to one Local Department without documenting whether it evaluated and scored the grant application in compliance with its one-time grant funding evaluation and scoring methodology. CJAD management asserted that the scoring committee and CJAD's executive management discussed the grant application and verbally communicated the approval of the funds.

Not consistently following its scoring methodology or retaining adequate supporting documentation limits CJAD’s ability to ensure the transparency and objectivity of the evaluation process.

Jump to Chapter 1-B 

For fiscal year 2018 and fiscal year 2019 through February 28, 2019, CJAD developed and complied with a methodology for awarding Pretrial Diversion Program Grants to Local Departments. The methodology considered Local Departments that submitted grant-funding requests to fund Community Supervision Officers and Case Aide positions for new Pretrial Diversion Programs that were not previously funded by CJAD.

From September 1, 2017, through February 28, 2019, CJAD awarded Pretrial Diversion Program funding totaling $1,763,117 to 31 Local Departments. For the 5 tested grant applications totaling $505,450 (out of a total of 31 applications), CJAD complied with its methodology. The Pretrial Diversion Program, which is an alternative to prosecution, seeks to divert certain offenders from traditional criminal justice processing into a program of supervision.

Jump to Chapter 1-C 

TDCJ did not ensure that employees directly involved in evaluating Diversion grant applications and awarding those grants disclosed potential conflicts of interest. Specifically, for fiscal year 2018, the CJAD Director completed an annual conflict of interest disclosure dated October 12, 2017. However, none of the evaluation committee members for the fiscal years 2018 and 2019 (through February 28, 2019) grant applications or related procurement and contract management staff completed an annual conflict of interest disclosure.

The State of Texas Procurement and Contract Management Guide requires state agencies to assess actual and potential conflicts of interests for evaluation committee members and technical advisors to the committee. In addition, TDCJ’s chief financial officer, in an inter-office communication dated September 7, 2018, stated that division directors should identify staff directly involved in procurement or contract management within their division and require the identified individuals to sign a Disclosure of Potential Conflicts of Interest form annually.

Not ensuring that individuals involved in the grant evaluation and awarding process disclose potential and actual conflicts of interest limits TDCJ’s ability to identify and address conflicts in a timely manner and ensure the integrity of the evaluation process.

Jump to Chapter 1-D 

Program Requirements. CJAD’s monitoring processes include compliance reviews to determine Local Departments' compliance with Diversion Program requirements. Those compliance reviews include an examination of the Local Departments’ records and/or activities related to the programs funded with Diversion Program grants. From the 124 Diversion Program compliance reviews that CJAD conducted at Local Departments, auditors tested 11 and determined that CJAD followed its documented monitoring processes.

Financial Requirements. In addition to monitoring compliance with program requirements, CJAD monitors compliance with financial requirements, which includes requiring Local Departments to obtain annual financial audits and submit quarterly financial reports. CJAD obtained the required CPA audit reports from all of the Local Departments except from those that were exempt. For the 25 funded programs tested (out of 235 total funded programs), CJAD received the required Quarterly Financial Reports from Local Departments and reviewed those within two months.

Jump to Chapter 2-A 

CJAD has monitoring processes in place to review third-party vendor use of Diversion Program grant funds. For example, CJAD verified that required clauses from its Contract Management Manual were included in the Local Departments’ vendor contracts related to grant funds.

However, it should strengthen those processes by (1) ensuring that monitoring includes all vendors that receive Diversion grant funds and (2) reviewing the vendor contracts in accordance with its policies.

Jump to Chapter 2-B 

Graphics, Media, Supporting documents

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