A Performance Audit
An Audit Report on Contract Change Management at the Department of Transportation
March 2020
Summary Analysis
The Department of Transportation (Department) has processes in place for the review and approval of highway construction and maintenance contract change orders. In addition, the Department executed construction and maintenance contract change orders in accordance with applicable requirements.
For construction contract change orders, the Department should ensure that it (1) determines whether documentation of verbal approvals is required for change orders, as it is for certain Department processes, and (2) documents all required reviews, including environmental assessments. For maintenance contract change orders, the Department should improve processes to ensure that it (1) executes change orders prior to beginning work, (2) affixes professional engineering seals, and (3) documents and maintains cost adjustment support.
The Department ensured that construction and maintenance contractors obtained performance and payment bonds for the original contract amounts as required by Texas Government Code, Section 2253.021. The Department also semiannually published information about completed highway construction projects on its website in compliance with Texas Transportation Code, Section 201.812.
The Department should also strengthen certain controls relating to its back-up and disaster recovery plan and logical access for its construction and maintenance contract management information system.
The Department processed 11,015 highway construction and maintenance contract change orders totaling $882,351,487 between September 1, 2017, and August 31, 2019.
The Department executed construction change orders as required and had documentation to support that cost adjustments and price justifications occurred for most of the change orders tested. However, the Department should ensure that it (1) determines whether documentation of verbal approvals is required for change orders, as it is for certain Department processes, and (2) documents all required reviews, including environmental assessments.
The Department executed maintenance change orders as required. However, improvements are necessary to help ensure consistency for (1) work that begins prior to change order execution, (2) the affixing of professional engineering seals, and (3) the documentation and maintenance of cost adjustment support.
The Department required contractors to obtain performance and payment bond coverage and complied with statutory reporting requirements.
The Department should strengthen certain controls related to (1) its back-up and disaster recovery plan and (2) logical access for its highway construction and maintenance contract management information system. The Department has implemented certain controls over the approval process of change orders in its information system.
Graphics, Media, Supporting documents