A Performance Audit
An Audit Report on Contracting at the University of Houston
January 2020
Summary Analysis
The University of Houston (University) planned and formed its contracts for basketball arena enhancements (basketball arena contract) and chemical waste disposal services (chemical waste contract) in accordance with applicable requirements and its Contract Management Handbook. The University also complied with applicable requirements related to contracting policies, procedures, and training.
In addition, the University complied with most procurement requirements for those two contracts, as well as a contract for asbestos and lead consulting services (consulting services contract). However, it should strengthen some procurement processes such as those related to emergency purchases and conflict of interest statements. The University should also enhance compliance with statutory reporting requirements.
The University had some effective contract monitoring and oversight processes in place but did not consistently submit timely payments to two contractors or include interest charges on overdue payments as required by statute. Additionally, the University lacked (1) policies and procedures for closing out contracts and (2) documentation of ongoing monitoring activities related to the basketball arena contract.
The University of Houston (University) planned and formed its two contracts related to basketball arena enhancements and chemical waste disposal services in accordance with applicable statutes and its Contract Management Handbook.
The University complied with most procurement requirements for all three contracts audited. However, the University should strengthen procurement processes related to emergency purchases, excluded parties verification, and conflict of interest statements and nepotism disclosures.
The University had some effective contract monitoring and oversight processes in place, but it did not consistently submit timely payments to the contractor or include interest charges on overdue payments as required by Texas Government Code, Section 2251.025. It also lacked documentation of ongoing monitoring activities related to the basketball arena contract and lacked policies and procedures for contract closeouts.
The University implemented policies and procedures to address applicable contract-related requirements in Texas Education Code, Section 51.9337, and Texas Government Code, Chapter 2261, Sections 253, 254, and 256.
The University did not consistently report contracts to the Legislative Budget Board (LBB) in accordance with the General Appropriations Act (GAA) and Texas Government Code.
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