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An Audit Report on Facilities-related Contracts at the Department of Transportation

August 2019

Summary Analysis

The Department of Transportation’s (Department) Support Services Division – Facilities Planning and Management Section (Facilities Section) generally planned, procured, and formed its $1.85 million contract with Vincent’s Roofing Inc. in accordance with applicable requirements. However, the Department should strengthen its controls over required disclosures.

The Facilities Section also performed monitoring activities for the audited contract. However, auditors identified weaknesses in its oversight of (1) payments, (2) change orders, and (3) contract closeout activities. Overall, the Facilities Section should improve its processes for administering its facilities-related contracts. Specifically, the Facilities Section:

  • Does not have a comprehensive set of approved policies and procedures for the development and administration of facilities-related contracts. The lack of a comprehensive framework has contributed to inconsistent processes and documentation.
  • Did not have adequate controls to ensure that its facilities-related contract data was accurate and complete.

 Jump to Overall Conclusion

The Department’s Facilities Section does not have a comprehensive set of approved policies and procedures for its administration of facilities-related contracts, including planning, procurement, formation, and oversight. Having detailed policies and procedures for all aspects of the Facilities Section’s planning, procurement, formation, and oversight processes would help ensure that facilities-related contracts are administered in a consistent and effective manner.

Jump to Chapter 1-A 

The Facilities Section uses a spreadsheet to manually track the details of its facilities-related contracts. Auditors reviewed the information in the Department’s financial accounting system (PeopleSoft Financials) and identified 47 facilities-related State Let contracts, with a total value of $18.3 million, that were not included in the spreadsheet. Auditors also identified a significant number of data fields in the spreadsheet that were incomplete or contained inaccurate information. The Facilities Section uses the data in that spreadsheet to produce key management reports, including its master budget for facilities and its quarterly report to the Joint Oversight Committee on Government Facilities. As a result, Department management and state officials could potentially make decisions based on incomplete or inaccurate information.

Jump to Chapter 1-B 

To improve the consistency and effectiveness of its facilities planning and management operations, the Department’s Facilities Section should consider developing and implementing documented processes for:

  • Producing and maintaining important management documents and reports.
  • Documenting significant management decisions made throughout the lifecycle of its facilities-related contracts.
  • Establish and implement a process to determine when minimum bidder qualifications are necessary on a facilities-related contract.

Jump to Chapter 1-C 

The Department’s Facilities Section performed monitoring activities for its $1.85 million contract with Vincent’s Roofing Inc. However, the Facilities Section should improve its monitoring of (1) payment processing, (2) change orders, and (3) contract closeouts.

Jump to Chapter 2 

The Department’s Facilities Section planned, procured, and formed the audited contract in accordance with applicable requirements.

Jump to Chapter 3-A 

The Department did not ensure that the seven employees involved in the procurement of the audited contract with Vincent Roofing Inc. completed a Nepotism Disclosure Form, as required by Texas Government Code, Section 2262.004. The Nepotism Disclosure Form is required to be completed even in the absence of potential or actual nepotism. While auditors did not identify any instance of nepotism, ensuring that the required disclosure forms are completed by all applicable parties could help the Department ensure that the procurement process is fair and objective.

In addition, the individuals involved in the procurement and management of the audited contract did not complete a conflict of interest statement. This included the seven Facilities Section employees who procured (recommended for award) the contract and the three Facilities Section employees who managed the contract. The Department asserted that Title 34, Texas Administrative Code, Section 20.158, requires conflict of interest disclosures be documented only when a potential or actual conflict exists. Therefore, the Department did not require its employees involved in the procurement or management of a contract to document their asserted absence of a conflict of interest.

Jump to Chapter 3-B 

Graphics, Media, Supporting documents

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