UT-Austin investigating former procurement official after review finds irregularities

The University of Texas at Austin is investigating financial irregularities tied to a former procurement director who resigned from the system flagship in mid-April and now holds a similar position at the Austin Independent School District.

An internal UT review found that Felix Alvarez, former assistant vice president for procurement, business and payment services, double-dipped on travel funds, may have misused purchasing cards and raffled off athletic tickets for personal gain, costing the university several thousand dollars, according to one source who has seen the document. The review has not been released publicly and appears to be related to a university police investigation.

Alvarez did not respond to requests for comment.

In August and September, The Texas Tribune requested memorandums and reports about UT’s procurement practices and the university’s assistant vice president for procurement — the position Alvarez held until April. But the university’s police department objected to releasing the information because “it relates to and is being utilized in the investigation of an ongoing criminal investigation,” according to a letter sent from a UT System lawyer to the Texas attorney general’s office. The Tribune received the letter as part of the public information request process.

Asked about the internal review, a UT-Austin spokesperson, J.B. Bird, said he could not provide information beyond the letter.

Alvarez is the second UT-Austin official to come under scrutiny in recent months for allegedly running afoul of the university’s financial processes. In September, a university investigation found the law school’s former facilities director, Jason Shoumaker, defrauded UT out of nearly $1.6 million, not including some $270,000 paid to an outside law firm hired to review his activities and the university’s practices.

That investigation found that lax oversight allowed Shoumaker to get away with a host of financial and professional improprieties, including falsifying documents, making questionable purchases, and funneling payments to vendors who may have been friends and associates. He was indicted by a Travis County grand jury last December on counts of theft, money laundering and abuse of official capacity.

Shoumaker's attorney, Perry Minton, said at the time that "we stand ready to address" any mistakes Shoumaker has made. The case is pending.

The UT flagship has already made efforts to tighten its financial controls, and the law school must pay the university an estimated $110,000 to audit its business operations for a year.

Alvarez, who began work at UT in January 2017, did not oversee the law school’s purchasing processes, Bird said.

A LinkedIn page bearing Alvarez’s name says he executed purchase orders and contracts of up to $1 million, and oversaw several “high profile campus-wide process improvement initiatives” that included “revamping” the purchasing card program and other responsibilities.

UT-Austin’s Senior Vice President and Chief Financial Officer Darrell Bazzell said in a note announcing Alvarez’s hiring in 2017 that Alvarez had previously held procurement or contracts-related roles at a number of public entities, including the University Health System, the San Antonio Independent School District and the city of San Antonio.

It’s unclear if Austin Independent School District officials knew of UT’s review before hiring Alvarez as its executive director of contract and procurement services.

An AISD spokesperson, Eddie Villa, said the district contacted Alvarez’s former employers before hiring him and that one unfavorable recommendation would not disqualify an applicant.

“We look at the whole thing — his experience as a whole,” Villa said. Because school district staff are on Thanksgiving holiday, Villa said he could not immediately confirm when AISD learned of UT’s review.

Bird said Alvarez’s former supervisor — Bazzell, the university’s CFO — was contacted by an AISD representative Sept. 25 — about a month after Alvarez’s appointment was approved by the district’s board of trustees. Bazzell returned the call the following day and confirmed Alvarez’s start and end dates and that he resigned, but “declined to respond to questions about Alvarez’s performance,” Bird said.

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