Contract monitoring is a process of ensuring that a vendor adequately performs a contracted service and begins after a contract has been fully executed. The obligations accepted by the vendor are stated in the contract; however, that does not guarantee the vendor will maintain contract compliance.

Failure to ensure that a contract is adequately monitored could result in:

• Lost Revenue
• Failed Audits
• Loss of Future Funds

The purpose of contract monitoring:

• Improve program performance through early identification
• Identify potential problems
• Ensure that financial documentation is adequate and accurate so that costs will not be questioned at a later date
• Reduce costs
• Improve quality

Work Plan

The Work Plan is part of the contract and is normally associated with service contracts/agreements. However; it can be used with any contractual agreement with DHS. The Work Plan has both a Contract Monitor and a Fiscal Monitor.

• Contract Monitor: responsible for the actual monitoring of program aspects of the contract including, but not limited to, the periodic and ongoing review of reports or other valid indications of performance. The contract monitor also assumes oversight responsibility for fiscal monitoring of the contract.
• Fiscal Monitor: accepts responsibility for actual monitoring of all fiscal aspects in the contract, including ongoing verification of invoices and auditing functions.

Duties and Responsibilities

The duties and responsibilities of a Contract Monitor include, but are not limited to:

• Ensuring the vendor is performing the work as listed in the contract and/or statement of work.
• Conducting on-site visits to observe work in progress
• Coordinating any appropriate contract amendments
• Reviewing invoices to verify:
  • Was the item billed actually purchased by the Vendor?
  • Was the item billed used for the purpose of the contract?
  • Was the item necessary and reasonable for the purpose of the contract?
  • Were the goods/services billed by the vendor actually delivered to and accepted by DHS?
• Immediately alerting management if vendor is not performing satisfactorily or if terms on the contract are being violated
• Knowing what the agency is receiving and what is being paid for
• Ensuring the vendor is in compliance with the terms and conditions of the contract
• Ensuring invoices are submitted in a timely manner
• Maintaining appropriate records
• Completing the Contract Monitor Checklist for every invoice received.

Invoicing

It is very important to know what you are agreeing to pay for when approving an invoice.

Before approving, always check for the following:

• Invoice date
• Date of service
• Amount being billed
• Who received the goods/services
• What was delivered (was it part of the contract/budget)