The Authority has been aware of shortcomings in its processes for managing its wide range of contracts for at least the past three years. It published internal audits in 2015 and 2016 that identified significant deficiencies in its contract management and oversight, including its failure to implement necessary policies and procedures, its lack of documentation of contract management activities, and its failure to establish sufficient oversight structures to ensure effective contract management. In February 2015, the Authority's Audits Office completed the first of these audits to determine whether the Authority was managing contracts in accordance with state and Authority expectations. The Authority conducted a follow-up audit in May 2016 with the same focus.
The 2015 audit emphasized that a structured contract management process is necessary to define responsibilities for administering contracts and for monitoring and evaluating contractors' performance. However, the audit found that the Authority's contract managers did not always receive proper guidance and often lacked the technical expertise to thoroughly manage contracts. The audit also identified numerous instances in which poor communication between the RDP consultants and the Authority meant that the Authority's contract managers were uncertain whether invoices that the RDP consultants approved were for appropriate services and whether contractor work products were reasonable based on their costs.
Key Recommendations From the Authority's Internal Audits February 2015: • Develop effective, comprehensive contract management processes unique to the types of contracts that the Authority manages. • Implement a formal system of review and oversight of contract managers. • Establish performance standards for contract management. • Develop individual contract work plans that include how the Authority will manage segmented responsibilities through a communication plan that identifies roles and responsibilities. May 2016: • Establish oversight for contract managers, along with clearly documented expectations and regular communication to ensure contract requirements are met. • Ensure that persons performing contract management have sufficient information to determine if invoiced costs are reasonable and deliverables meet requirements. Source: The Authority's February 2015 and May 2016 internal audits of contract management. | Released 15 months later, the 2016 audit confirmed that these contract management issues persisted and were widespread. After reviewing a wider range of contracts and contract managers, the Authority's auditors concluded that contract managers continued to delegate core contract management tasks to the RDP consultants, that roles and responsibilities for contract managers and the RDP consultants were not clearly defined, and that oversight of contract management was still insufficient. Further, this report highlighted that contract managers did not proactively document their expectations for work products, putting the Authority at risk of paying for inappropriate or unsatisfactory work. The Authority has repeatedly acknowledged the need to address its contract management deficiencies. Each internal audit report contained recommendations intended to address inadequate contract management policies and structures. The Authority's management concurred with these recommendations, which the text box summarizes. In response to the 2015 internal audit, management asserted that the Authority had contract management policies, procedures, roles, and responsibilities in place. However, it acknowledged that contract managers had not consistently adopted those policies and procedures. After the 2016 internal audit revealed ongoing widespread deficiencies, the Authority's management recognized that the implementation of existing contract management policies had not yet yielded the desired results. |