Audit Focuses on Contracted Janitorial Services at City Facilities
No Major Issues Seen at 50 HPD Locations and 85 Other City Facilities
February 17, 2016 -- A newly released contract performance audit by the Office of the City Controller’s Audit Division concludes that McLemore Building Maintenance, Inc., has adequate administrative and internal controls in place to ensure the fulfillment of service obligations outlined in two contracts (one for 50 Houston Police Department facilities and another for 85 other City locations), both approved by City Council in 2013; both contracts have three-year terms with options for two additional years. Total payment to McLemore in 2014 was $3.4 million.
The audit was included in the FY 2015 Controller’s Office Audit Plan.
During the period covered by the audit the contracts were managed by the Property Management Division of the General Services Department. Primary services contracted with McLemore include general cleaning and janitorial service, collection of recycled materials, interior and exterior window washing and power washing.
The Audit Division reviewed contracts and change orders; reviewed evidence to support contactor compliance with insurance certification and drug policy procedures; reviewed on-site staffing, both for McLemore and subcontractors; reviewed contractor compliance with quality control requirements; reviewed calendar year 2014 invoices, including a sample of 30 for substantive testing; reviewed MWSBE contract participation; and conducted visual observations to verify contracted services.
There were no significant issues found in either of the contracts. The audit findings did conclude that internal controls to monitor the service obligations were not consistently applied at all facilities.
“This audit was part of the FY 2015 Audit Plan, which is based on our enterprise risk assessment process, and was not a specifically requested audit,” says City Controller Chris Brown. “These are two fairly large contracts, with multiple facilities, and large contracts are usually where you can find the most opportunities for improved efficiency—and where you can find the most fraudulent activity, which is not the case here. The issues with internal controls identified in this audit are issues that can be addressed by McLemore and General Services.”