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Friday, January 22, 2021

State auditor: General Land Office mishandled contracts

AUSTIN, Texas (AP) – The Texas State Auditor’s Office says the General Land Office has made mistakes in handling nearly $6 million in contracts over the past few years, including vastly underestimating project costs.

A report released Tuesday by the State Auditor’s Office detailed “significant weaknesses” in three contracts between 2010 and 2015, ranging from $1 million to $2.8 million.

The audit states that managers who oversaw those contracts for technology, environmental and audit services failed to scrutinize the agency’s needs before entering the contracts. If the managers had done so, the audit says, the state may have saved hundreds of thousands of dollars.

In one case, the land office didn’t consider how much it would cost to hire full-time employees to audit oil and gas royalties instead of using contractors. Hiring four state employees for the work would have cost $426,000, much less than the approximately $1 million contract it now has with Grant Thornton, according to the State Auditor’s Office.

The audit also states the land office failed to disclose a conflict of interest in one contract and used untrained contract managers.

General Land Office spokesman Bryan Preston said the agency has already addressed a number of the report’s findings. All three contracts were signed during former Land Commissioner Jerry Patterson’s tenure.

Since taking office in January, Commissioner George P. Bush has established a compliance and ethics division and has required all contract managers to complete the comptroller’s contract management training. Bush also is updating the agency’s contracting processes to comply with new safeguards recently adopted by the Legislature.

State Sen. Jane Nelson, who authored legislation calling for more stringent oversight and tougher contracting requirements, praised Bush’s work on the issue. She said lawmakers will be closely monitoring compliance with the new law.

“Sound contracting practices are essential to delivering state services efficiently and in accordance with the highest ethical standards,” Nelson said.

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