A Performance Audit
An Audit Report on The Soil and Water Conservation Board’s Compliance with Historically Underutilized Business and State Use Program Requirements
July 2021
Summary Analysis
The Soil and Water Conservation Board (Board) did not always comply with requirements related to the HUB program. The Board should ensure that it:
- Reports accurate expenditure and supplemental information for inclusion in the semi-annual and annual HUB reports.
- Compiles adequate supporting documentation for the supplemental information submitted to the Office of the Comptroller of Public Accounts (Comptroller’s Office).
- Develops agency-specific HUB goals.
- Participates in HUB outreach activities.
- Monitors contractors’ use of HUB subcontractors.
The Board did comply with other HUB requirements, including adopting HUB rules, developing a written HUB plan, designating a HUB coordinator, and establishing a mentor-protégé program. In addition, the Board notified eligible vendors, including HUBs, of contracting opportunities; required bidders to provide HUB Subcontracting Plans (HSPs); and included the HSPs as terms in its contracts.
The Board mostly complied with the requirements related to the State Use Program. However, the Board should strengthen its processes to ensure that all State Use Program purchase exceptions are reported to the Comptroller’s Office and the Texas Workforce Commission.
The Soil and Water Conservation Board (Board) did not have an effective and defined process for compiling and reporting the required information for inclusion in the semi-annual and annual Historically Underutilized Business (HUB) reports by the Office of the Comptroller of Public Accounts (Comptroller’s Office). As a result, the Board did not report HUB subcontracting expenditure information to the Comptroller’s Office for fiscal year 2020, nor did it remove intergovernmental expenditures from the Comptroller’s detailed calculations of expenditures as required. Those actions resulted in inaccurate information being included in the Comptroller’s Office’s Fiscal 2020 Annual Report for the Statewide Historically Underutilized Business (HUB) Program. In addition, the Board did not have supporting documentation that matched the supplemental information reported to the Comptroller’s Office for inclusion in the annual HUB report.
The Board complied with most HUB planning requirements. However, the Board did not establish agency-specific HUB goals for each procurement category.
Additionally, the Board should strengthen its HUB outreach efforts. From September 1, 2019, through January 31, 2021, the Board did not participate in any HUB forums sponsored by the Comptroller’s Office or sponsor any in-house presentations by HUBs.
The Board complied with the HUB contracting requirements of Texas Government Code, Chapters 2155 and 2161, and Title 34 of the Texas Administrative Code.
However, for 1 (20 percent) of the 5 contract solicitations tested, the Board could not provide documentation to support its assertion that it solicited bids from all eligible vendors on the Centralized Master Bidders List in accordance with Texas Government Code, Section 2155.264.
The Board ensured that its contractors submitted HUB subcontracting plans (HSPs) for all seven contract solicitation responses tested. Specifically, the contractors submitted fully completed HSPs timely, and, when applicable, their identified HUB subcontractors were certified at the time of submission. Additionally, the Board ensured that for the four contracts that resulted from the seven solicitation responses tested, the HSP was included as part of the contract, as required by Texas Government Code, Section 2161.253.
However, the Board did not monitor HSPs in accordance with requirements. Specifically, the Board did not obtain monthly Progress Assessment Reports for the two contracts in which HUB subcontractors were identified in the HSP. The Board was able to provide certain invoices with information about subcontractor payments for one contract in the sample, but the information was not in the required Progress Assessment Report format, which was developed by the Comptroller’s Office. Title 34, Texas Administrative Code, Section 20.285, requires a monthly report in the format developed by the Comptroller’s Office as a condition for payment by the contracting state agency.
The Board mostly complied with requirements related to the Purchasing from People with Disabilities Program (State Use Program). However, the Board should strengthen its processes to ensure that all State Use Program purchase exceptions are reported to the Comptroller’s Office and the Texas Workforce Commission, as required by Texas Human Resources Code, Section 122.0095.
The Board had policies and procedures that comply with Title 1, Texas Administrative Code, Chapter 202, which requires state agencies to implement information technology controls in accordance with the Department of Information Resources’ Security Control Standards Catalog.
In addition, the Board appropriately restricted access to its internal directory in which information used to report HUB data is stored. The Board also restricted access to the Uniform Statewide Accounting System, which it used for payment processing, to current and appropriate staff.
Graphics, Media, Supporting documents