The Comptroller’s Office should also strengthen its efforts to prevent unallowable purchases through TXMAS contracts and strengthen controls over the incidental charges associated with TXMAS purchases. For example:
State agencies and certain governmental entities are required to follow Texas Government Code, Chapter 2254, to procure professional and consulting services.
The procedures in that statute require awards to be based on factors such as demonstrated competence and vendor qualifications. However, TXMAS contracts are based
on competitive awards. Auditors identified 9 state agencies that had ordered $15,695,081 in professional and consulting services through TXMAS contracts between June 1, 2014, and February 18, 2016.
Incidental charges associated with TXMAS purchases are intended to be limited to installation, installation parts, inside delivery, or set-up. However, auditors identified inappropriate incidental
charges for administrative fees and rebates that TXMAS contractors must pay the Comptroller’s Office, as well as the inappropriate use of incidental charges for items (such as chairs) that should
have been purchased through a contractor’s catalog or contractor price quotes. Auditors identified instances in which the inappropriate use of incidental charges reduced the State’s rebate revenue
and resulted in overcharges to customers.
While the Comptroller’s Office is not statutorily required to monitor how customers use TXMAS contracts, it has the information necessary to do so and has begun to make efforts to ensure that
customers use TXMAS contracts appropriately.
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