Office of the Legislative Auditor - Financial Audit Division

Report Summary
Professional/Technical Contract Expenditures
Internal Controls and Compliance Audit

Background

Over fiscal years 2015, 2016, and 2017, the state paid approximately $1.2 billion for professional/technical services to outside contractors.

The Office of the Legislative Auditor conducted this audit to determine whether the Department of Administration’s Office of State Procurement provided adequate oversight of professional/technical contract processes and expenditures for five state departments. The departments, which had the largest expenses for professional/technical contracts during the three fiscal years covered by our audit, included Corrections, Education, Human Services, Transportation, and the Pollution Control Agency.

Conclusion

For the departments included within the scope of our audit, we concluded that the Department of Administration’s Office of State Procurement provided generally adequate oversight over their use of professional/technical contracts.

In addition, we concluded that the departments of Corrections, Education, Human Services, Transportation, and the Pollution Control Agency generally selected contractors and executed contracts in accordance with applicable legal requirements; accurately paid for services received; and properly recorded the expenditures in the state’s accounting system. However, we did find some instances of noncompliance and internal control weaknesses, as noted in the findings in this report.

Audit Findings

• The Pollution Control Agency did not properly approve or validate some contractor payments.
• Three agencies did not fully comply with a contract requirement that they retain a specified amount of money pending the successful completion of a contract.
• All of the agencies we examined failed substantially to comply with a legal requirement to file a report with the Department of Administration on the performance of contractors, and the department failed to enforce the requirement.