in Houston, Texas
Major change could come out of Houston ISD procurement audit
Monday, Feb 06, 2012, 08:59AM CST
By Mike Cronin
Change sign

If the response by Houston schools officials to past audits is any indication, district parents and residents could see major changes to the school system’s procurement practices during the next few months.

Two separate organizations – the Washington-based nonprofit Council of the Great City Schools and the Houston accounting firm, Null-Lairson – have both examined the way the school system does business.

The council released its report of the audit it conducted in October last month. Null-Lairson is scheduled to complete its audit and issue its findings to Houston Independent School District officials during the upcoming weeks, board members and administrators have said.

HISD revised policies and changed personnel in key positions after the Council of the Great City Schools’ 2010 audit of the district’s capital facilities program found, among other things:
  • Substantial financial errors
  • The program had been operating without annual budgets, standard contract forms or budget evaluations.
  • The program had no set timelines for the completion of projects and lacked standard guidelines as to how projects would be established, evaluated and completed.
  • The program had no tracking system of amendments to projects that enlarged their scope and price tag, and that district staff had “no understanding of the impact” of such changes on costs.
District improvements based on that 2010 review were significant, Issa Dadoush, HISD’s general manager for construction and facility services, told Texas Watchdog in a phone interview.   

Among the most critical revisions in HISD procedures included:
  • Merging the previously separate construction department and facilities department. “Before, they were totally independent,” Dadoush said. “They were two silos and didn’t communicate with each other.”
  • Cultivating a pool of custodians similar to substitute teachers. “Back in 2010, it was not unusual to have 12 to 14 percent of our custodial staff absent,” Dadoush said. “We covered that with overtime, spending about $11 million annually. Since we created the (new system), we’ve saved HISD about $6 million.”
  • Re-establishing the district’s preventive-maintenance program. Now, Dadoush said, HISD is 27 percent more productive, acting on 139,000 work orders, as opposed to 110,000 prior to the council’s 2010 audit.
  • Starting an employee-evaluation process for contractors and consultants to hold them accountable. “The council’s 2010 report showed us that many employees didn’t receive evaluations,” Dadoush said. “Now, we articulate goals and objectives, and what are our performance measures, as well as the consequences for not meeting them.”
  • Hiring spot checkers to examine performance.
  • Becoming a “data-driven organization, where we analyze the cost-per-square-foot relative to others in our industry,” Dadoush said.
Though all those measures are good ones, Dadoush emphasized he and his colleagues aren’t finished yet.

“We’ve moved from a fair organization to a good organization,” he said. “We respond to about 95 percent of our work orders in a timely fashion. That means we still have thousands of work orders not responded to in a timely fashion. We want to get that number to 99 percent.

“We’re a work in progress,” Dadoush said. “We’re an open book.”

HISD officials paid about $22,000 for the 2010 council review, HISD spokesman Jason Spencer said.

District administrators are still waiting for the council’s bill for this year’s audit on HISD’s purchasing procedures, Spencer said.

The school board in October approved paying Null-Lairson up to $87,500 for the audit that firm is currently conducting.

The council’s October audit found that the ways HISD does business “lead to a perception of manipulation of and distrust in the procurement process.”

The report also concluded that “the majority of the district‘s purchasing... is awarded based on a number of weighted factors that are not always transparent or consistently applied.”

Michael Casserly, executive director of the Council of the Great City Schools, told Texas Watchdog that HISD’s lack of transparency in its contract-awarding methods was the district’s most serious problem.

Spencer declined to answer questions of how the district would address the council’s findings, saying that would be “inappropriate” until the Null-Lairson conclusions are released.

***
Contact Mike Cronin at mike@texaswatchdog.org or 713-228-2850. Follow him on Twitter at @michaelccronin or @texaswatchdog.

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