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A recent audit of the contract between the City of
Houston and the Texas Department of Information Resources
(TDIR) uncovered overpayments and lapses in internal
controls.
TDIR was hired three years ago to help the City
purchase computer hardware and software products and
associated services. Auditors reviewed approximately
$7 million of purchases made by five City departments
between April 2000 and June 2002. During the period
of the audit, TDIR was overpaid at least $81,000 and
possibly as much as $160,000 more than the contract
allows. There were no procedures in place to ensure
the fees paid to TDIR were in line with the amounts
allowed by the contract.
"Without this review the overpayments would not have
been identified. I am pleased to hear that the City
is now attempting to obtain a refund," said Judy Gray
Johnson, Houston City Controller.
Auditors also noted a failure to adhere to the City's
procurement policies and procedures. Invoices, accounts
payable information, requisition forms, and packing
slips were missing. Two purchase orders lacked documentation
to support additional goods and services. "These lapses
in internal controls make it difficult for City departments
to track the delivery and receipt of products," said
Controller Johnson.
A final area of concern dealt with the delivery of
goods. The contract requires TDIR to deliver products
within 14 days or provide written notification as
to the reason for delay, thus enabling the City to
make alternative arrangements, if necessary. 53% of
the purchase orders reviewed were not delivered in
a timely basis and there was no documentation provided
to explain why the Vendor had missed the deadline.
The auditors offered numerous recommendations for
improvement, many of which are already being implemented.
In addition to attempting to collect refunds on the
overpayments, we have been notified that the City's
Strategic Purchasing Division (SPD) is working with
TDIR and the various City departments to improve documentation
for fees and late deliveries. SPD should be commended
for taking such quick action.
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