SALEM, OR — Today, Secretary of State Dennis Richardson released an audit entitled, “Higher Education Coordinating Commission Needs to Address Weaknesses in Procurement Practices.”
The audit found that Oregon’s Higher Education Coordinating Commission (HECC) agency is at risk of failing to procure goods and services in accordance with state laws and lacks a robust and effective procurement system.
“One of the reasons procurement laws and rules are created is to reduce legal and security risks to the state,” said Secretary of State Dennis Richardson. “To minimize these risks, it is important for HECC and other state agencies to comply with procurement laws and rules.”
HECC is responsible for coordinating among the state’s public universities, community colleges, and workforce system to improve postsecondary education access and achievement for Oregonians. Most of HECC’s procurements include agreements and contracts with municipalities, community colleges, school districts, and business partners such as scholarship foundations or workforce boards.
The audit team reviewed the procurement practices HECC had in place from July 2015 through March 2017. From November 2016 to March 2017, HECC had 748 open contracts and agreements valued at $117 million.
Auditors identified several weaknesses in HECC’s procurement practices including:
- Lack of a robust governance structure to ensure procurements comply with state laws and rules;
- Backlog of contracts and agreements;
- Noncompliance with several contracting rules;
- Lack of clearly defined procurement roles and responsibilities; and
- Insufficient training leading to confusion and inconsistent procurement processes.
Failure to comply with contracting rules can lead to increased legal and security risks. For example, the audits team found 65% of the 748 contracts and agreements entered into from November 2016 to March 2017, were either funded or work began before valid contracts or agreements were in place.
To establish and maintain a robust procurement system, the auditors recommend HECC create a governance structure that clearly defines procurement roles and responsibilities. In addition, HECC should fully develop, implement, and train its staff on the procurement roles, polices, processes, and procedures. HECC management also should immediately address the backlog of procurement contracts and agreements, and ensure consistent adherence to state procurement laws and rules.
Read the full audit here.