40 Tex. Admin. Code § 7.61

Current through Reg. 49, No. 44; November 1, 2024

Section 7.61 - Contract Monitoring

All contracts must be monitored for compliance.

(1) Construction contracts. The monitoring activities for all construction contracts must include performing desk reviews of invoices and reports and conducting on-site reviews.

(2) Certain professional services contracts. The monitoring activities for all professional services contracts for architects, engineers, and land surveyors must include periodic reviews of work product.

(3) Interagency and interlocal contracts. The monitoring activities for all interagency and interlocal contracts must include performing desk reviews of invoices and reports; evaluating the contractor's performance upon completion of the contract; and, if appropriate, requiring prior approvals for expenditures.

(4) Certain contracts for goods and non-consumer services. The monitoring activities for all contracts for goods and non-consumer services that do not exceed $25,000 must include performing desk reviews of invoices and reports.

(5) Performance contracts.

(A) To determine necessary financial monitoring activities:

(i) staff must assess each local authority's financial risk through ratio analysis of the authority's liquidity, ongoing operations, and capital structure, which is based on annual and quarterly financial information submitted by the authority; and

(ii) staff must conduct a desk review of each local authority's annual audit to determine audit quality and to identify findings and questioned costs. Staff must ensure that a local authority submits a corrective actin plan that addresses all findings and questioned costs.

(B) To determine necessary performance monitoring activities staff must conduct a review of each local authority's performance reports and assess the authority's performance risk by analyzing data regarding at least the following information:

(i) the local authority's ability to provide services to the required (or target) number of consumers;

(ii) the local authority's performance outcomes (e.g., state hospital bed-day usage);

(iii) allegations and confirmations of abuse, neglect, and exploitation at the local authority; and

(iv) number and type of complaints about the local authority.

(C) Financial and performance monitoring activities of performance contracts shall be in proportion to the risk assessed in accordance with subparagraphs (5)(A) and (5)(B) of this paragraph. Monitoring activities include:

(i) regular or periodic communication between TDMHMR staff and local authority staff;

(ii) regular or periodic reviews of detailed reports required to be submitted by the local authority;

(iii) providing training or technical assistance; and

(iv) conducting on-site reviews.

(6) All other contracts. Contract monitoring requirements for all contracts not described in paragraphs (1)-(5) of this section are as follows.

(A) Contract monitoring levels and examples of monitoring activities are as follows:

(i) Level I - TDMHMR performs desk reviews of invoices and reports, and evaluates the contractor's performance upon completion of the contract.

(ii) Level II - TDMHMR performs desk reviews of invoices and reports; requires prior approvals for services and/or expenditures; and evaluates the contractor's performance every six months or upon completion of the contract if the term is less than one year.

(iii) Level III - TDMHMR performs desk reviews of invoices and reports; requires prior approvals for services and/or expenditures; conducts on-site reviews to ensure specific performance and service levels (as defined in the contract) are met; and evaluates the contractor's performance quarterly and upon completion of the contract.

(B) Each contract must be assigned a monitoring level based on staff's risk assessment of the contract. Risk assessment factors must include at least the following:

(i) licensing or regulatory oversight of the contractor;

(ii) geographic dispersion;

(iii) contract term;

(iv) number of consumers to be served;

(v) service mix and complexity of service or complexity of specifications;

(vi) degree of competition;

(vii) historical performance of contractor; and

(viii) the contract amount.

(C) TDMHMR shall monitor contracts at the level that corresponds with the assigned risk assessment.

(7) Consumer services contracts. In addition to the monitoring requirements and activities described in paragraph (6) of this section, for consumer services contracts TDMHMR must evaluate:

(A) the safety of the environment in which services are provided;

(B) the contractor's compliance with the contract, including the clearly defined performance expectations (as referenced in §417.56(b)(1) of this title (relating to Provisions for All Contracts)); and

(C) satisfaction of consumers and family members with services provided.

40 Tex. Admin. Code § 7.61

The provisions of this §7.61 adopted to be effective July 1, 2001, 26 TexReg 4719; Transferred effective September 1, 2004, as published in the Texas Register September 10, 2004, 29 TexReg 8841