Upset about the way a recent state audit portrayed the agency he led for 12 years, former Land Commissioner Jerry Patterson is jabbing his successor, fellow Republican George P. Bush, for failing to push back against the audit’s findings.
“I can’t speak to the motive of the current Commissioner for apparently endeavouring to drop his predecessor 'in the grease,' Patterson said in an email Wednesday, “but I would suggest he put more focus on doing his job and less on covering his derriere.”
State Auditor John Keel’s report, published Tuesday, called the General Land Office’s contracting processes riddled with “significant weaknesses,” raising questions about how wisely the agency was spending millions of dollars. The three contracts Keel examined happened under Patterson’s watch.
The land office this week agreed with the auditor’s many recommended fixes and said it was already making changes. On Thursday, the agency said it had no comment on Patterson's remarks.
"We're moving forward with the reforms that Commissioner Bush has initiated," Bryan Preston, a spokesman, said.
Patterson said he did not begrudge Keel’s office, which he called “extremely professional” and “the best.” Instead, he directed his anger at Bush, a rising political star in his first year of public office, for failing to send Keel additional context that might have softened his findings.
“An audit should be a two way endeavor where both the auditor and audit subject are engaged in the process,” Patterson said. “It is the responsibility of the agency to provide the rationale for certain decisions when the auditor finds an apparent discrepancy.”
The audit specifically dinged the agency for how it handled two contracts and dealt with a potential conflict of interest on one of them: a $1 million contract with Grant Thornton for auditing oil and gas royalty payments to the state.
The 179-year-old agency’s many duties include managing the rights to millions of acres of Texas-owned minerals, which pump billions of dollars into the state’s Permanent School Fund.
Keel criticized the agency for failing to study cheaper auditing options than Grant Thornton, saying that it could have hired four new full-time employees to do the job for just $428,000, including benefits. The report also identified a potential conflict of interest: a land office employee who worked on the contract received a personal loan from her former supervisor – a Grant Thornton subcontractor who was also involved with the contract.
Patterson homed in on that finding, arguing that hiring four new employees would only save money if they were terminated once the audits were done.
“Is that a good idea to fire people when they’re done or to instead find work for them to do when you don’t really need them anymore?” Patterson asked. “Would that option enhance employee morale or employee productivity?”
Patterson also noted that Grant Thornton’s audits found between $4 million and $5 million in previously unrealized royalty income. Additionally, he said, Keel’s report did not mention that Grant Thornton later submitted proposals to do more audits at less than half the price “because they had already hired and trained the needed contract personnel and paid for their startup costs.”
Patterson conceded that his agency did not follow certain administrative procedures, and that a former and current General Land Office employee both working on the Grant Thornton contract should have disclosed potential conflicts of interest.
He did not specifically address other problems Keel found, such as a roughly $1.9 million information technology contract that the agency initially pegged at about $93,000 after failing to “include key information, such as project time lines and applicable Texas Administrative Code information technology requirements,” during planning.
On Tuesday, the land office noted that Bush recently created an Office of Compliance and Ethics, saying it has “increased the depth and types of conflict checks on all potential vendors for appearances of and actual conflicts of interest prior to each procurement.”