A Performance Audit
An Audit Report on Contract Change Orders and Amendments at the Texas Facilities Commission
The Texas Facilities Commission (Commission) had processes and related controls to help ensure that change orders and amendments were administered in accordance with applicable requirements. However, those processes and controls had some weaknesses, and the Commission did not always follow them for the two contracts audited:
- A construction services contract for demolition of a state office building complex with 28 change orders and 3 associated amendments that increased the original contract value by $2,181,032.
- An elevator maintenance services contract with 6 amendments as of May 2022 that increased the original contract value by $2,464,160.
The Commission had processes and controls for making written modifications to its contracts. However, it did not ensure that (1) change orders for the demolition contract were approved before the work began or that (2) amendments to the elevator contract were executed (i.e., signed) before they took effect.
APPROVALS AND REVIEWS
The Commission obtained all required approvals for the change orders for the demolition contract. However, weaknesses in the Commission's Automated Procurement System and processes for approving and reviewing amendments resulted in the omission of required approvals and essential contract clauses.
For both contracts tested, the Commission reported all nine amendments to the Legislative Budget Board as required. However, an error made when reporting Amendment No. 4 to the elevator contract resulted in the contract value being underreported by $122,400, and the Commission reported Amendment No. 1 to the elevator contract three days later than required.