Youth Commission, Texas
An Audit Report on Contract Administration at the Texas Youth Commission
Report Number 96-005
Contractors for the Texas Youth Commission are not adequately monitored to ensure quality services are provided. None of the 46 contract files randomly selected for review had documentation that the service provider had been monitored on a quarterly basis as required by Commission policy. Four of these contracts were renewed with contractors despite current performance problems.
The Commission has developed outcome and output measures to gauge the performance of residential care contractors. However, our review found that the Commission s monitors rely on performance measure reports primarily only when preparing annual provider evaluations and not for routine, ongoing assessment and monitoring of provider performance. As a result, available performance data is not used to maximize and focus limited monitoring resources.
The Commission s current level of fiscal oversight is not sufficient to ensure that the agency receives the best value for its contracting dollar. The Commission does not systematically set rates for contracts and does not adequately monitor contractor financial controls or the use of start-up funds. Our review of Commission service providers found that the rates paid to contractors sometimes exceeded the costs to provide services as evidenced by an accumulation of fund balances. For the three providers we reviewed, fund balances totaled over $1.6 million. There are no current state statutes which require the Commission to limit contractors expenses to certain categories of cost. However, this should not preclude the Commission from including reasonable limitations in its contracts.
The majority of existing contracts at the Commission were not awarded using a competitive bid process. Only 11 of the 46 contracts we reviewed were awarded using a Request for Proposal. While state statute requires the Commission to select contractors based on qualifications and demonstrated competence of the provider, the majority of contracts we reviewed were awarded based only on recommendations by regional directors and contract monitors.
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