Natural Resource Conservation Commission
An Audit Report on Contract Management Processes at the Texas Natural Resource Conservation Commission
September 1996
Report Number 97-004
Overall Conclusion
The Texas Natural Resource Conservation Commission (Commission) has recently enhanced contract administration by establishing a centralized contract management function. However, improvements are still needed for the overall agency and within individual programs. Commission processes for monitoring contractor compliance with performance and financial requirements do not always detect deviations from contract expectations and requirements. No fraud was detected during our limited review. During fiscal year 1995, the Commission reported expending approximately $142 million on contractual relationships. The Commission estimated $169 million in contractual obligations for 1996.
Key Facts and Findings
While management has streamlined the Petroleum Storage Tank reimbursement process, oversight of contractual relationships within the program is not yet sufficient to ensure that the program has paid for actual services performed. We questioned approximately $31,753 in reimbursements made to claimants who submitted deficient supporting documentation and who did not explain variances from approved amounts. Statutorily required claims audits were not initiated by the Commission for over a year, and program inspections are not based on a formal risk assessment.
Current Waste Tire Recycling program administration practices allow for significant exceptions to established rules and do not address known deficiencies of the program or its participants in a timely manner. During our audit, we determined that reimbursements have been made to processors who did not meet registration rule requirements. Additionally, inspection violations of some processors have not resulted in timely enforcement action.
Contract monitoring practices within the Clean Rivers program are not sufficient to ensure that payments are made for appropriate activities and expected results. We questioned approximately $32,250 in payments made to river authorities from the Clean Rivers program for charges not adequately supported, and for charges appearing to be unreasonable or not directly attributable to the program. Additionally, financial monitoring and formal audits are not conducted for program fund recipients.
Contract management practices regarding start-up phase contracts appear sufficient within the state-funded Superfund program to ensure that appropriate and qualified contractors will be selected, and that deliverables will meet negotiated cost and performance expectations.
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