An Audit Report on the East Texas Council of Governments' Procurement of Services for Selected Programs
August 2010
Report Number 10-038
Overall Conclusion
The East Texas Council of Governments (Council) followed statutory and contractual requirements when procuring and providing services funded through the State for its Child Care Services Program and its Rural Transportation Program. However, auditors identified areas for improvement in the Council's procurement of services for its Senior Nutrition Program.
Senior Nutrition Program
Although the Council has a documented procurement process for awarding contracts for its Senior Nutrition Program, it did not follow that process when selecting a provider for the program. The Council did not document the criteria it used to resolve an appeal of an award recommendation. Although it completed the initial assessment and ranking of proposals based on standardized criteria, the Council modified its award recommendations after one provider appealed the initial recommendations, and it awarded a contract to a provider that had not submitted a proposal. The Council did not document the criteria or other information it used as the basis for modifying its initial award recommendations.
In addition, the Council did not adequately document a plan for operating and evaluating a congregate dining pilot program or all of the costs associated with operating the pilot program. As part of that program, the Council contracted with a private provider for the bulk meals; the Council provided all other services, including transportation, meal service, set-up, and clean-up. Auditors calculated that the Council's average cost per meal was $10.88 at the pilot program's location from March 2009 to September 2009. In contrast, the average cost per meal at congregate dining locations operated by other providers was $5.52.
All 29 Senior Nutrition Program expenditures auditors tested were allowable in accordance with contract requirements and applicable regulations. The Council's fiscal year 2009 expenditures for the Senior Nutrition Program totaled approximately $4.0 million.
Child Care Services Program
The Council's Child Care Services Program's procurement process met competitive bidding requirements and had sufficient monitoring processes, which the Council used to determine that the provider did not meet the agreed-upon performance target. However, the Council did not follow up to ensure that the provider submitted a corrective action plan to rectify the deficiencies identified, as required by contract, until the Texas Workforce Commission issued a sanction for the shortfall in December 2009. In response to the sanction, a corrective action plan was developed and the sanction was removed in May 2010.
All 17 Child Care Services Program expenditures auditors tested were allowable in accordance with contract requirements and applicable regulations. The Council's fiscal year 2009 expenditures for the Child Care Services Program totaled approximately $15.0 million.
Rural Transportation Program
The Council's Rural Transportation Program's 2007 contract with the prior transportation provider met competitive bidding requirements, and the Council awarded the contract to the proposal that received the highest score. In September 2007, the Council began directly providing Rural Transportation services. The Council engaged the Texas Transportation Institute to analyze the cost-effectiveness of providing the transportation services in-house and has implemented its plan to provide those services. Since taking over the operation of the program, the Council has increased transportation services provided to its residents.
Under its direct operation, the Council increased average ridership-from 70,250 total riders in fiscal year 2007 to 107,673 total riders in fiscal year 2009, a 53.3 percent increase. Additionally, the program's total expenditures increased-from $2,733,427 in fiscal year 2008 to $4,068,938 in fiscal year 2009, a 48.9 percent increase. The largest increases were in the areas of salaries and total benefits, fuel and maintenance, and capital equipment.
All 25 Rural Transportation Program expenditures tested were allowable in accordance with contract requirements and applicable regulations.
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