OFFICE OF THE GOVERNOR WILLIAM P. CLEMENTS, JR. GOVERNOR MEMORANDUM TO: Governor Clements FROM: Paul T. Wrotenber SUBJECT: SERIOUS MHMR PROBLEMS IN THEIR CONSTRUCTION AND MAINTENANCE DIVISION DATE: May 21, 1981 You may be aware that, based on an internal audit of MHMR, there are highly questionable management practices that have been found to exist at MHMR leading to a possibility that considerable sums of money may have been ineffectively spent. Further investigation is currently taking place by the Attorney General and District Attorney regarding possible criminal activity that may be associated with this misman- agement and alleged apparent excessive expenditures. I am attaching a copy of the operational audit which was done by our private and public sector audit team last year which highlighted concerns that led to the internal audit which has brought this issue to the surface. I think this once again points out the tremendous value of the Operational Audit Program and that both our private and public sector participants in the Operational Audit Program should be commended for their efforts in this regard. I understand from television reports that Speaker Clayton is establishing a Legislative Review Committee to look into this matter. I think it would be helpful to him, prior to the establishment of this committee, that you make him aware of our prior efforts which have led to the recent disclosures. By copy of this memorandum, I am also providing him a copy of the MHMR Construction Maintenance Operational Audit Report. SAM HOUSTON BUILDING • P.O. BOX 12428, CAPITOL STATION • AUSTIN, TEXAS 78711