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.
In a report released Tuesday by the State Auditor's Office, "significant weaknesses" in three contracts between 2010 and 2015, ranging from $1 million to $2.8 million were detailed.
The audit states 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, then the state may have saved hundreds of thousands of dollars, according to the audit.
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 also failed to disclose a conflict of interest in one contract and used untrained contract managers.
Spokesman Bryan Preston for the land office 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.
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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.
