A Performance Audit
An Audit of Contracting at The University of Texas Health Science Center at Houston
April 2022
Summary Analysis
The University of Texas Health Science Center at Houston (Health Science Center) had processes in place to ensure that it procured, selected, and provided oversight of the contracts tested in accordance with applicable requirements. Specifically, the Health Science Center:
- Complied with requirements for procuring contracts and issuing payments.
- Adequately monitored contractor performance.
- Ensured that vendor proposals were selected fairly and objectively and were scored and ranked accurately.
- Complied with requirements related to contracting policies, procedures, and training.
However, the Health Science Center should strengthen certain controls over vendor selection and contract reporting. Specifically, required disclosures were not always completed timely. In addition, the Health Science Center did not comply with requirements for reporting contracts to the Legislative Budget Board and did not consistently ensure that contract information was reported accurately.
The Health Science Center had processes in place to ensure that it complied with its requirements for the procurement of its contracts. In addition, it issued contract payments in compliance with applicable rules and adequately monitored contractor performance for the selected contracts.
The Health Science Center had processes in place to ensure that vendor proposals were selected fairly and objectively. However, disclosures were not always completed as required.
- Four (15 percent) of 27 staff evaluators involved in the procurement of the contracts tested did not sign and complete a conflict of interest form before beginning work on procurement, as required by the Health Science Center’s Contract Management Handbook. In addition, two of those evaluators did not have a completed conflict of interest form for one of the contracts tested, as required by Texas Government Code, Section 2261.252.
- All 27 employees involved in the procurement of the contracts tested had signed Nepotism Disclosure Forms. However, 6 (22 percent) of those employees did not submit a signed and completed Nepotism Disclosure Form before the contract was awarded, as required by Texas Government Code, Section 2262.004.
The Health Science Center implemented policies and procedures in its Contract Management Handbook to address contract-related requirements in the Texas Education Code and the Texas Government Code. For example, the Health Science Center’s handbook is consistent with the State of Texas Procurement and Contract Management Guide, which includes statutory requirements. In addition, the Health Science Center’s policies incorporate statutory requirements for training and certification of employees involved in the contracting process.
The Health Science Center staff involved with the procurement of the four contracts tested had the required certifications and training. Those requirements included training in ethics, selection of appropriate procurement methods, and the purchase of information resource technologies.
The Health Science Center did not consistently report contracts to the LBB in accordance with the General Appropriations Act (86th Legislature), Article IX, Section 7.04. State entities are required to report all contracts, including amendments, modifications, renewals, or extensions with a total combined value of $50,000, regardless of funding source. The Health Science Center also did not always accurately report contract information to the LBB.
Auditors analyzed active contract and purchase order vendors from September 1, 2020, through September 17, 2021, with a value of $50,000 or more and reconciled that list with the list of vendors the Health Science Center reported to the LBB. At least 141 (82 percent) of 171 unique vendors identified with contracts that met the statutory reporting threshold did not have any contract information reported to the LBB.
The Health Science Center accurately reported 1 (25 percent) of 4 contracts tested to the LBB. However, the other three contracts did not have the correct contract number, award date, and contract value in the LBB Contracts Database.
Graphics, Media, Supporting documents