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EANES ISD CONSTRUCTION
AUDIT
Excerpt from
audit:
We
identified approximately $663,000 of questionable payments
to
contractors that should be further examined by EISD as to whether
reimbursements to EISD for these payments are warranted.
In
September 2005 and again
January 2006, KeepEanesInformed requested access (pursuant to the Texas Public
Information Act) to the attached PDF document. I received the attached
document 15 months later in December 2006 and then, only
after filing a complaint with the Travis County Attorney David
Escamilla. An investigator from the County Attorney's office
accompanied me to Eanes ISD when I finally obtained this construction
audit. Following is a sample of the findings uncovered in the audit
and never made public by the school district.
We need to strengthen access to public
information about our public schools, demand effective recordkeeping and
quick enforcement of Chapter 552 when districts refuse to comply.
- "Assessment
performed from October 2003 through December 2003 in accordance with the
terms of our engagement letter dated June 12, 2003"
- Report dated May
10, 2004
- "The primary
objective of this assessment was to determine whether Eanes has
established a construction management program with an effective set of
internal controls that assist in appropriately managing
construction-related costs.........we identified a number of
opportunities for improvement that are highlighted in the Executive
Summary..."
Executive
Summary - ...a number of
opportunities exist for EISD to improve controls in the program to
appropriately manage construction-related costs. We
identified approximately $663,000 of questionable payments to
contractors that should be further examined by EISD as to whether
reimbursements to EISD for these payments are warranted.
- EISD should
consider developing and implementing standard construction agreements
that adequately protect the interests of EISD. The contracts should be
clear, concise and free of ambiguous terms
- EISD should
consider establishing additional guidelines for contractors to follow
for the submission of payment requests.......should
require that sufficient supporting documentation and appropriate
explanations be provided with the payment request.
- EISD should
consider appointing a single EISD employee to perform a review of
payment requests rather than the cursory review that is currently being
performed.
- The Change Order
Policy approved on August 28, 2002 should be complied with or
consideration should be given to further revising the procedures to
reflect current practice.
- .EISD should also
consider improving its internal
procedures to improve overall management of change
orders.
- The physical
maintenance of construction agreements and payment documents should be
improved
- Formal documented
policies and procedures for the construction management process should
be developed and communicated to relevant staff for consistent and
timely application.
Specific
Findings and Recommendations
- Two contracts did
not stipulate the nature and amounts of insurance coverage to be carried
by the contractor.
- Three contracts
did not provide for the securing of a performance bond by the contractor
- Three contracts
did not state procedures to be followed where extras or revisions are
required
- Three contracts
did not contain "right to audit" clause in regarded to contractor's
records
- None of the
contracts reviewed provided explanations on how "back billing to the
contractor for services supplied by the location is to be handled.
- General charges,
such as raw materials, labor and installation charges, totaling $324,650
were paid without a breakdown of the components
- Charges totaling
$42,125
that are considered to be part of the Basic Services Fee were separately
reimbursed by EISD
- A
difference of$26,392
between the amount billed and the contracted amount for Avnet was noted.
- Charges of $24,400
were paid using funds from an unrelated project.
- EISD risks paying
for overcharges or unsupported or unauthorized charges due to relying on
an architect to review payment requests instead of assuming full
responsibility for careful, thorough reviews of charges prior to
payment.
- Given
the extent and magnitude of the potential questioned costs identified
within this report, EISD should consider appointing an
EISD employee to closely review and approve payment requests.
- EISD did not fully
comply with the Change Order Policy. Specifically, several changes in
scope were made to the Avnet contract without processing a change order
as required by the procedures. Our review of this contract indicated
that the project drastically changed from what was originally agreed
upon...
- The
maintenance of Change Order documents was substandard
and is in need of improvement...
- EISD may
not be able to effectively monitor contracts or track payment history if
documents can not be easily located or if files are so cumbersome and
disorganized that the paper trail for contracts cannot be
followed. Additionally, EISD could be reimbursing contractors for
charges that may not have been appropriately authorized through approved
change orders.
- EISD's
construction processes are not documented in the form of written
policies and procedures.
- During this
process, we noted that an unclear understanding of
responsibility among EISD personnel was observed. By
not having formal written policies and procedure, the processes cannot
be appropriately audited for compliance with management directives.
Also, without documented polices and procedures, may not be performed as
management intended.
