State Auditor Sees Weaknesses in Agency Contracting

For the most part, state agencies comply with existing contracting requirements, but several struggle with two basics: shopping for a vendor and monitoring that vendor's performance, the Texas state auditor's office said in a report on Tuesday. 

The report provided no new findings — but tallied the results of 14 audits issued by the auditor's office between July 2012 and December 2014. Combined, those previous findings present a critical picture of state agency contracting. 

"The majority of state entities audited did not consistently maintain documentation of their proposal evaluation processes and/or document their determinations of best value," the auditor's office wrote in the report. "In addition, of the reports that discussed conflicts of interest, the majority of the state entities did not adequately identify and/or document conflicts of interest for the contracts audited." 

The auditor's office also took issue with what it called inconsistent contracting policies.

"Specifically, more than half of the audit reports concluded that the state entities audited did not have adequately documented contract management policies and procedures," the report stated.

Contracting has become a hot issue this legislative session as one of the largest state agencies, the Texas Health and Human Services Commission, endures three different reviews of its contracting procedures following questions over a $110 million deal the agency struck with 21st Century Technologies, an Austin firm, for Medicaid fraud software. The auditor's office is one of the three entities in the midst of reviewing HHSC contracting procedures.

In December, HHSC Inspector General Doug Wilson and chief counsel Jack Stick were forced to resign following questions about the selection of 21CT and Stick's ties to a former lobbyist for the company. HHSC Executive Commissioner Kyle Janek has said he was "misled" about the contract. 

"I didn’t do anything wrong, and I’d hope Kyle Janek, my colleagues and anyone who knows me would know that," Stick told The Texas Tribune on Tuesday.