Authority/Reference(s) Texas Human Resource Code 2 §40.058(c); Texas Government Code §2261.253, §2261.256; State of Texas Procurement and Contract Management Guide
Revision Date October 4, 2021


Contract monitoring is an activity performed by contract staff within the DFPS contract management lifecycle. The objectives of contract monitoring are to ensure compliance with:

  • Applicable state and federal regulations;
  • DFPS policies, as applicable; and
  • Terms and conditions of the contract.

Contract monitoring is distinct from general contract oversight, which is defined as routine contract management activities that have a structured emphasis on reviewing the operations and performance of a contractor, and addressing any developing concerns or issues.

Contractor noncompliance issues are often identified during contract monitoring. Contract staff must maintain an awareness of a contractor's performance throughout the duration of the contract to assess for risk due to the type, complexity, and payment method involved in the contracted good or service.

Contract monitoring is an activity within contract management that may serve as:

  • Risk mitigation by identifying potential issues and early detection for course correction;
  • An opportunity to determine the contractor’s need for technical assistance; and
  • A source for information to determine the effectiveness and quality of goods and services being provided.

DFPS requires contractors to maintain financial, programmatic, and administrative records that adequately support goods and services provided in compliance with their contract terms and conditions. Significant or repeated noncompliance issues could indicate the contractor’s failure to provide adequate services, possible harm to clients, or inappropriate use of resources (see policy Contractor Noncompliance and Contract Remedies).

Contract staff must monitor the highest risk (see policy Review Reason) contracts as established by the Client Services and Administrative Specialized Monitoring Plans (SMP). In addition, contract staff are required to respond to contract events that may require an Enhanced Level of review. Contract staff must also respond to Complaints against the contractor and Follow-up on any unresolved systemic contract issues.

Note: Residential Child-Care (RCC) contracted operations with a Heightened Monitoring designation are exempt from the SMP process. See policy Client Services SMP.

Monitoring Roles and Responsibilities

Contract Oversight and Support (COS) is responsible for:

  • Coordinating annual review, revisions, and maintenance of Risk Assessment Instruments (RAIs) and Risk Analysis Assessments (RAAs).
  • Coordinating cross-divisional data-risk analysis that may include Contract Performance, Contract Divisions, Legal, and Finance.
  • Analyzing risk assessment data and publication of the Specialized and Enhanced Monitoring Plans.
  • Updating and maintaining monitoring policies in accordance with state and federal regulations.
  • Training contract staff and providing technical assistance, as needed.
  • Working with contract divisions to ensure monitoring events are current in the System of Contract Operations and Reporting (SCOR).
  • Conducting quality assurance reviews on monitoring activities conducted by contract staff.

Contract Divisions are responsible for:

  • Reviewing content and recommending modifications to the RAIs and RAAs.
  • Completing risk assessments on all applicable contracts, entering RAI data and uploading related documentation into SCOR.
  • Completing monitoring activities on all contracts identified on the SMP (unless adjusted using the Form 9103 process) and ensuring all required monitoring documentation is uploaded into SCOR.
  • Continually assessing risk of contracts and adjusting monitoring activities throughout the fiscal year, as needed.
  • Adhering to all applicable Contract Handbook and other DFPS policies.
  • Developing monitoring tools based on the type and complexity of each contract.
  • Documenting noncompliance and assessing and enforcing remedies.
  • Communicating monitoring results and conducting applicable follow-up, as needed.
  • Selecting in SCOR the monitoring reason (unless already identified via a risk based process and on the SMP), review type, review level, and review location as outlined below and in their respective policies.

Monitoring Reason

Contract monitoring activities must be documented in SCOR, where monitoring is categorized by a review reason. Within SCOR, there are multiple monitoring reasons available for selection by contract staff, which are:

  • Risk Based
  • Enhanced
  • Complaint
  • Follow-Up

Policy Review Reason provides details for each of the monitoring reasons.

Monitoring Type

For each monitoring event, contract staff must select a review type that can be determined by RAI scores (if applicable), performance analysis, and observations of the contractor. Contract divisions can focus on one or more of the following review types:

  • Programmatic
  • Administrative
  • Fiscal

Policy Review Type details each of the monitoring types.

Monitoring Level

The monitoring level is determined by contract staff for each monitoring event and relates to the monitoring type and the depth of monitoring to be conducted. The options are as follows:

  • Targeted
  • Comprehensive

Policy Review Level details each of the monitoring levels.

Monitoring Location

The monitoring location is determined by contract staff. The options are as follows:

  • On-Site
  • Desk review

Policy Review Location details each of the monitoring locations.

Planning, Conducting, and Concluding Monitoring

To complete a monitoring review, contract staff must prepare, perform, and conclude the monitoring review using applicable tools. Monitoring activities must be documented in SCOR and a monitoring report is required in order to conclude a monitoring event.