Texas Comptroller Carole Keeton Strayhorn on Wednesday recommended the state terminate its contract with Accenture Ltd., a private company hired to administer health and human services to low-income residents.

Strayhorn says she conducted the review into Bermuda-based Accenture's $900 million contract at the request of Sen. Eliot Shapleigh, D-El Paso; Rep. Carter Casteel, R- New Braunfels; and Rep. Carlos Uresti, D-San Antonio.

After a five-month review of the contract, Strayhorn says she found that the project was $100 million over budget, and Accenture had neither met its performance requirements nor been accountable for its failure.

Strayhorn says clients are still reporting inaccuracies and delays in processing their applications.

In addition, Strayhorn says that between the time Accenture took over operations on Dec. 1, 2005, through August 2006, enrollment in the Children's Health Insurance Program dropped by 8.5 percent or 27,567 children.

Strayhorn says it was unlikely that most of the children who were dropped from CHIP were transferred to Medicaid since enrollment in children's Medicaid also fell during this time period by 2.9 percent or 53,937 children.

"The contract with Accenture must be ended," Strayhorn says. "This project has failed the state and the citizens it was designed to serve. I recommend that the contract with Accenture should be ended and that the Legislature pass emergency legislation that removes (Texas Health and Human Services Commission's) direct management of the project and places responsibility with a turnaround team composed of experts who can effectively manage state resources and stop the drain on tax dollars."

Strayhorn says the turnaround team transition should be funded by the $20 million in profit Accenture has made while "mismanaging its contract."

As of Aug. 31, HHSC has paid Accenture more than $123 million to process eligibility for a fraction of Texas' applicants, Strayhorn says, adding that the project that was intended to save money will end up costing the state $100 million more.

Accenture representatives said Wednesday afternoon that they will soon issue a statement.

The company, which hired former Perry staff members, is the subject of a political ad for Chris Bell, the Democratic candidate for governor. Bell, independents Strayhorn and Kinky Friedman and Libertarian James Werner are running against Perry for governor. Perry's camp questioned the timing of Strayhorn's recommendation, which is being issued just weeks before the November election.