A Performance Audit
An Audit Report on Contracting at the Juvenile Justice Department
Because of significant weaknesses in its contracting processes, the Juvenile Justice Department (Department) did not follow the proper procurement procedures for the two contracts audited.
Texas Conference of Urban Counties (Urban Counties) Contract
The Department did not allow enough time for planning for its contract with the Texas Conference of Urban Counties (Urban Counties) for Juvenile Case Management System (JCMS) operations and maintenance.
TrueCore Behavioral Solutions (TrueCore) Contract
The Department made the decision to create and issue a new contract to the same vendor (TrueCore) without following the procurement process steps such as planning, method determination, evaluation, and award.
Oversight and Contract Formation
The Department performed monitoring for the two contracts; however, it should strengthen its contract oversight processes to ensure that Urban Counties complies with service level agreements for JCMS and that all findings from its monitoring activities for TrueCore are addressed. The Department’s contracts with Urban Counties and TrueCore contained most essential clauses according to the State of Texas Contract Management Guide.
The Department Did Not Use the Appropriate Procurement Method for the Texas Conference of Urban Counties Contract Due to Weaknesses in the Planning Process.
As a result of not properly planning the procurement for JCMS services, the Department did not use the appropriate procurement method for its contract with Urban Counties. Specifically:
The Department inappropriately procured those services in January 2017 as a proprietary purchase with Urban Counties. A proprietary purchase is for products or services that have distinctive characteristics for which only one vendor can provide.
The Department did not properly plan a subsequent competitive request for offer (RFO), which it canceled after scoring the five responses received, asserting that the scoring did not accurately reflect the technical requirements.
It then extended the proprietary contract with Urban Counties, which had submitted a proposal to that competitive RFO and did not receive the highest score. As of May 2019, the proprietary contract was still in effect, and a new contract based on a competitive solicitation has not been executed.
The Department made the decision to create and issue a new contract to the same vendor (TrueCore) without following the procurement process steps such as planning, method determination, evaluation, and award. Although changes were made to improve the contract, they could have been made with amendments, as the changes were to procedures and how services were delivered, not to the services provided.
The Department Performed Some Monitoring for Its Contract With Urban Counties; However, It Should Strengthen Its Monitoring Processes to Include Reviews of Service Level Requirements
The Department conducted and documented weekly conference call meetings with the contractor and the counties that use JCMS regarding system changes and issues.
While the Department’s contract with the Texas Conference of Urban Counties contained service level agreements, which outline required service availability and incident response times, the Department did not have a process to ensure that the contractor met those service requirements.
As of February 2019, the Department had made six payments totaling $3,028,250 for the contract audited. Auditors tested all six payments and verified that all were timely and had the required approvals.
The Department Performed Monitoring Activities for Its Contract With TrueCore; However, It Should ensure That All Identified Issues Are Communicated to TrueCore as Required, and It Should Strengthen Payment Process Controls
Auditors tested the Department’s four monitoring activities of TrueCore: Monitoring and Inspections (M&I) annual site visits; quarterly risk management reviews for site safety and security; annual health services reviews; and monthly case management site visits for fiscal years 2018 and 2019. For three of those monitoring activities, the Department had sufficient documentation that the monitoring activities were performed and that identified issues were corrected.
While the Department ensured that its payments to TrueCore were approved as required, some payments were late and did not include the interest that accrued as a result of those late payments.
While Both Contracts Had Most Required Clauses, the Department Should Ensure That All Requirements Are Included
Although the Department’s contracts with the Texas Conference of Urban Counties and TrueCore lacked some clauses required by the State of Texas Contract Management Guide, the Department processed contract amendments as required by its contract policies and procedures.
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