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An Audit Report on Selected Texas Education Agency Contracts and Grant with Education Service Centers

November 2016

Report Number 17-013

Overall Conclusion

The Texas Education Agency (Agency) should improve its contract procurement and formation processes and strengthen its oversight of selected contracts and grants with education service centers (ESCs) to ensure that it complies with statutes, Office of the Comptroller of Public Accounts requirements, Agency policies and procedures, and requirements in the contracts and grant agreement. Specifically, for the two contracts and one grant agreement audited, the Agency did not have an executed contract or grant agreement before it allowed the Region 13 ESC (Austin) and the Region 20 ESC (San Antonio) to begin work under those contracts and grant agreement. The execution dates for those contracts and grant agreement, and their renewals and amendments, were between 12 days and 128 days after their effective dates (see text box for additional information on the contracts and grant audited).

The Agency had controls and processes related to payments for the ESC contracts audited, and it made payments in a timely manner and stayed within the contract budgets. However, the Agency did not require the Region 13 ESC to submit sufficient documentation with invoices to verify that (1) the Agency had received the invoiced services and (2) the expenditures were allowable and associated with specific deliverables under the contracts.

Additionally, the Agency did not consistently provide sufficient oversight of its contracts with the Region 13 ESC and its grant to the Region 20 ESC. Specifically, the Agency did not ensure that the Region 13 ESC’s staff made all required site visits or performed key monitoring activities, such as weekly program updates, at the required frequency. The Agency also did not ensure that all purchasing personnel completed the required disclosure statements prior to awarding the contracts.

The Agency established and generally followed entitywide contracting policies and procedures that were consistent with the State of Texas Contract Management Guide to award the audited contracts. For example, it involved the appropriate staff in the planning phase of the audited contracts, and it performed preliminary risk assessments to determine the appropriate level of oversight and management for the audited contracts. The Agency also included the necessary information in the solicitation documents for the contracts audited, and it evaluated bids appropriately.

The Agency generally monitored the CTEP grant in accordance with the grant requirements, applicable statutes and rules, and internal policies and procedures. However, it should strengthen certain aspects of its oversight of the CTEP grant.

Auditors communicated other, less significant issues related to the procurement, formation, and oversight of the contracts and grant agreement audited to the Agency separately in writing.

Table 1 presents a summary of the findings in this report and the related issue ratings. (See Appendix 2 for more information about the issue rating classifications and descriptions.)

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