TSU Office of Institutional Compliance

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Due Diligence

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"Due Diligence" is defined as the degree of care that a prudent person would exercise prior to entering into a transaction.

Effective January 3, 2003, all contracts/purchases requiring the Board of Regent’s approval (e.g., contracts/purchases over $100,000. See University Contract Administration Policy at http://www.tsu.edu/about/administration/general/CONTRACTS/Contract_Administration.asp) must receive a Due Diligence Review by the Office of Institutional Compliance. Items cannot be placed on the Board Agenda without a Due Diligence Summary completed by Compliance and approved by the Senior Vice President of the respective area.

OBJECTIVE

The due diligence review is a critical part of the contractual agreement process that allows the University the opportunity to analyze and mitigate risk prior to entering into the contractual relationship.

PROCESS

The Office of Institutional Compliance coordinates the due diligence review for contractual agreements at Texas Southern University. In accordance with University contract administration policy, all agreements that require approval by the Board of Regents must receive a due diligence review. Each prospective vendor or contractor must complete a DUE DILIGENCE PROFILE, available in PDF or Word format.

There are specific due diligence tasks that need to be completed prior to performing the Due Diligence Review and for that reason, The Office of Institutional Compliance requests a minimum of 10 business days for a complete Due Diligence investigation. To expedite the due diligence assessment, the following information should be requested from the vendor or contractor during the bid process and submitted to the respective department and the Office of Institutional Compliance:

·         Organizational Chart and Changes in Corporate Structure

·         Officers, Directors, Shareholders and Ownership Interest

·         Parent, Subsidiaries and Affiliates

·         Proof of Insurance (property, liability, and any other insurance)

·         Litigation (pending and probable)

·         Two-Year Audited Financial Reports, or Three-Year Un-audited Financial Reports and two years of tax returns,

·         Conflict of Interest Statement

·         Other pertinent information (as deemed necessary)

RESPONSIBLE PARTIES

An effective due diligence review requires a collaborative effort between those individuals who seek to receive goods or services, administrators who have the authority to obligate the University and other supporting departments at the University in accordance with applicable State guidelines and University policies and procedures. While the Office of Institutional Compliance is here to assist in this process, it is the responsibility of the Contract Manager to obtain all required forms and information for the Due Diligence Review.