An audit of the $462 million contract for standardized testing in Texas found holes in state oversight as well as lax terms that allowed the company to hire former state employees without restrictions or disclosure.
The five-year contract held by NCS Pearson Inc., which accounts for 61 percent of all Texas Education Agency contracts, has been a prime target for critics of the State of Texas Assessments of Academic Readiness, or STAAR.
They have decried the size of the contract, agency decisions that appear to benefit Pearson and the close relationship between agency officials and Pearson’s representatives. Lawmakers put provisions into law this year aimed at curtailing the influence of the company’s lobbyists.
Among the issues identified by the State Auditor’s Office in Tuesday’s report was a 2011 contract amendment that allowed former state employees to work for Pearson without restrictions and also freed the company from disclosing when it hired former agency employees, a violation of the state government code and contracting guidelines.
Contractors can hire former state employees, but those employees are barred for one year from working on projects they dealt with in their state jobs. Those hires must also be disclosed to the state.
That restriction, as well as the disclosure requirement, was struck from Pearson’s contract in 2011 when the agency was eliminating about one-third of its workforce due to state budget cuts. The objective was to give the company more flexibility in meeting its staffing needs and “help to ensure that the most qualified individuals would be eligible to work on the Texas contract,” agency officials wrote in 2011.
The auditor found that 11 former agency employees were later employed by Pearson, none of whom had been in high-level positions with the state. Only two worked directly on the Pearson contract, and their stints with the company were less than seven months, according to the auditor’s report.
The Texas Education Agency, which oversees Texas public schools, touted the auditor’s findings as evidence that Pearson has been living up to its end of the five-year deal and providing the agency with all the services for which it was hired.
Auditors also determined that the agency relied too much on Pearson to determine how much it will cost to complete certain jobs under the contract. That issue will be particularly relevant now that the Legislature has reduced the required number of high school end-of-course exams from 15 to five.
“There is a risk that the agency will not receive the appropriate reductions in contract if it does not independently calculate or verify those amounts,” the auditors wrote.
Education Commissioner Michael Williams welcomed the outside audit and agreed to enact the recommendations immediately. Among the changes will be to put in place a contracting expert whose sole responsibility will be to oversee Pearson’s work.
“I am confident that the Texas Education Agency has been an effective steward and watchdog of taxpayer dollars from the inception of this important contract,” Williams said in a statement. “However, the (auditor’s) review has provided recommendations that can help us better track and strengthen our oversight.”
The audit makes clear that the agency doesn’t have adequate resources to monitor such a huge contract nor the procedures to ensure Pearson is complying, said Susan Schultz, a board member of Texans Advocating for Meaningful Student Assessment, which pushed legislators to reduce the testing requirements.
“What does this mean for the credibility of the STAAR exams? This Pearson contract came under legislative scrutiny during the regular session. It seems that many questions are left unanswered,” Schultz said.