Audit points out problems with how HHS handles contracts

An audit of HIV grant contracts with the Austin/Travis County Health and Human Services from the last three years has turned up numerous inconsistencies, weaknesses, and failures, not to mention misunderstandings between city departments concerning proper adherence to the city’s anti-lobbying ordinance.

The Office of the City Auditor initiated the audit of the contracts after identifying contract-monitoring weaknesses in the entire social service open-bid process back in Oct. 2011. At that time, city auditors said the department had not been properly monitoring social service agencies to make sure they were complying with the terms of their contracts with the city. The audit presented to the City Council Audit and Finance Committee last week was initiated to determine whether HIV grant contracts were being properly monitored for compliance and to identify any control weaknesses with existing contract documents.

Perhaps the most significant finding of the audit was the revelation that prior departmental leadership had directed its staff not to monitor HIV grant contracts the city had with contractors. According to Assistant City Auditor Rachel Snell, there was no monitoring of contracts in 2009 and 2010 and limited monitoring in 2011.

“Some monitoring procedures were not documented, standardized, or implemented uniformly,” Snell said. “There are no monitoring practices to effectively verify the contractor’s review for double billing or ensure any double billing identified as credited back to the city.” The Auditor’s Department indentified at least $34,000 in services for which the city was double-billed.

The members of the committee were curious about why health and human services department leadership had directed staff not to monitor its contracts. HHS staff said they were told that not monitoring current contracts with companies that were seeking new contracts with the city was the best way to ensure compliance with the city’s anti-lobbying ordinance.

Bob Corona, chief of staff at HHS, said, “At the time it was our understanding, in consultation with various City Hall offices, which we were not to engage with contractors during the non-solicitation period during the social service RFP process.”

Council Member Laura Morrison was incredulous. “So that precluded monitoring of the contracts we currently had with them?” she asked. “I’d say that’s very problematic.”

At this point in the meeting it was clear there had been a miscommunication between HHS and other city departments. City Purchasing Officer Byron Johnson actually ran in at one point to clarify the no-contact provisions of the anti-lobbying ordinance and to speak to the committee members’ concerns.

“There is nothing in the anti-lobbying ordinance that prohibits discussions with existing contracts,” said Johnson. “(Former HHS Director) David Lurie said he was concerned about his staff talking to providers and mixing between existing contracts and new contracts, and he said, ‘I just don’t want them to have discussions about contracts.’ But they absolutely can talk, discuss, and monitor all those contracts.”

Johnson said his office became aware that HHS had implemented this no-monitoring policy about halfway through the social service RFP process, which began Oct. 11, 2010.

When asked later about this apparent miscommunication between departments, HHS staff, through their spokeswoman, Carole Barasch, told In Fact Daily, “In consultation with city of Austin offices (Purchasing & Ethics) HHS was not to monitor those contracts during the RFP social services solicitation.”

 

According to staff in the Purchasing Department, however, that was never the case. Public Information Officer Samantha Park told In Fact Daily, “There was no specific written directive that says, ‘Don’t monitor contracts.’ We would never give that directive; that makes no sense. The health folks will say the same thing. When we entered into the social service bidding process there were a variety of discussion where they asked, ‘We’ve got these vendors who we already have contracts with who are bidding for these new contracts, how do we handle that?’ There was a part of the anti-lobbying ordinance where it left it sort of open to interpretation on how strictly you control your communications with those vendors. What they (HHS) were trying to do is limit those communications to make sure no one inadvertently (violated) the anti-lobbying ordinance.”

The anti-lobbying ordinance has been amended since the close of the bidding process, partially, Park said, to make it clearer how the city can communicate with vendors.

At the meeting, current HHS Director Carlos Rivera assured committee members that he had put in new directives to improve his staff’s monitoring of contracts. Rivera, however, reaffirmed that his department had in fact been directed to act in the manner they did.

“When I started on August 1, what I found curious, if not disturbing, it just doesn’t make sense for people not to do their jobs because of an RFP being out there,” Rivera said. “But the rules that we were given reinforced the fact that we could not go out and monitor these contracts or we’d be in violation. This is what the staff believed. We’ve corrected that since then …  I take responsibility for making sure my staff is properly trained and able to fulfill their responsibilities. We’ve taken strong steps in the right direction, but certainly, we did have significant problems.”

In addition to those monitoring problems, the City Auditor’s Office found that HHS does not always renew grant contracts in a timely fashion, resulting in the city conducting business without an enforceable contract for more than 30 percent of the time. Also, the department’s payment and service delivery data is not always accurate or complete.