The state’s massive agency overseeing all health an human services needs “significant changes either in management structure or executive leadership” to lift itself out of a state of turmoil, according to a new study released Friday. The report, released by a “strike force” assembled by Governor Greg Abbott in January, said recent controversies over corruption are only symptoms of larger organizational problems within the agency.

The Health and Human Services Commission is a major component of Texas government, employing nearly one out of every five state workers and spending about $30 billion per year — more than a third of the state’s budget. Governor Abbott formed a team in January to look into problems at the agency after a $110 million state contract fell through over questionable contracting procedures in the agency with Austin-based software company 21CT. Subsequent investigations have led to several high-level resignations within the agency, including a gubernatorial appointee, Inpsector General Doug Wilson. Despite the report’s suggestion of “a change in leadership,” there’s still no word on the future of the HHSC’s executive director, Kyle Janek. Several lawmakers have called for him to step down, while Governor Abbott had previously said they would wait until after the report to make a decision.

That 21CT deal led to questions over the use of cooperative contracting, a type of contracting intended for smaller purchases that allows agencies to sidestep the normal bidding process. But Monday’s report defended that process, calling it a useful method often employed successfully by the state government. It points out “the 21CT controversy had as much to do with the actions of individuals as it did with the contracting process.” It suggested more restrictions and oversight on the Inspector General’s Office, as opposed to eliminating it altogether.

Monday’s report also urged caution about the idea of consolidation of HHSC agencies. Lawmakers have proposed turning the five agencies into one “mega agency” by 2016, but Monday’s report said many of the agency’s problems stem from the last consolidation — from 12 agencies to five — in 2003. The report said that deadline needs to at least be pushed back, and “may not be the right strategy for future success.” It urged lawmakers to consider the implications of that consolidation, saying the agencies are too broad to be successfully run by one entity. They say keeping some functions separate would lead to less risk of neglect and could help attract better and more specialized leadership.

Governor Abbott’s strike force included former Travis County state district judge and current UT Austin professor F. Scott McCown, as well as Texas A&M University System CFO Bill Hamilton, Texas Department of Agriculture CFO Heather Griffith Peterson, and former State Rep. Talmadge Heflin.

Governor Abbot released a statement responding to the quote, saying

“The report’s findings are deeply troubling. It is now more clear than ever that the Texas Health and Human Services Commission has been riddled with operational, managerial, structural and procedural problems that go far beyond any individual or contract. That is unacceptable. As Governor, I am committed to addressing these issues head-on.  Upon assuming office, I took the immediate step of directing all state agencies – including HHSC – to implement key transparency and accountability reforms to their contracting and procurement processes. I will take the findings of the strike force’s report into account as I determine what additional actions must be taken to ensure Texans can have the trust they deserve to be able to place in their government.”