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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Higher Education Coordinating Board
Fiscal 2010 First Quarter

We audited a sample of the Texas Higher Education Coordinating Board (Board) purchase, travel, and payroll transactions that processed through USAS and USPS during the period beginning Mar.1, 2008, through Feb. 28, 2009. We also reviewed a limited sample of court costs, refunds of revenue, grant transactions, and procurement methods. We reviewed each transaction in the sample to determine compliance with applicable state laws.

We reviewed purchase transactions for compliance with the General Appropriations Act (GAA), the State of Texas Purchase Policies and Procedures Guide (Purchase Guide), the State of Texas Procurement Manual (Procurement Manual), and other pertinent statutes. We identified instances of purchase agreements created after the invoice and purchase agreement missing, insufficient, or improperly changed. We also identified instances where the amounts paid were either incorrect or not allowable. In our review of the purchase transactions, we did not identify any significant issues related to compliance with procurement rules.

We reviewed the Board's compliance with the prompt payment and scheduling laws. We identified 16 payments where the Board did not properly pay prompt payment interest. We also identified eight payments that were paid too early, resulting in depository interest being lost. During the audit period, the Board paid $1,350.17 in late payment interest to vendors.

We reviewed travel transactions for compliance with the GAA, TexTravel, and other pertinent statutes. We identified issues of missing documentation, incorrect amounts paid for hotel occupancy tax, and failure to conserve state funds.

We reviewed payroll transactions for compliance with the GAA, the State of Texas Payroll Policies and Procedures Guide (Payroll Guide), and other pertinent statutes. We noted missing documentation for two personnel files that resulted in underpayments of longevity pay.

We also reviewed the Board's internal control structure. Our review was limited to obtaining an understanding of the Board's controls sufficient to plan our audit and did not include tests of control policies and procedures. We noted certain areas of risk involving the internal control structure and its operation. The Board had designated four employees with multiple security capabilities to process payments without oversight.

Our audit included a limited review of the Board's transactions relating to grant payments. This review consisted of verifying that the payments did not exceed the contract amount or the amount payable for each grant. We did not identify any errors in the payments reviewed. The review of these payments did not include an investigation of the Board's procedures for awarding the grants or monitoring payments made to grantees; therefore, we are not offering findings on those procedures.

We issued a prior post-payment audit of the Board's purchase, travel, and payroll transactions on Aug. 4, 2005. Recurring findings from the previous audit included: payments not properly scheduled, underpayments of longevity pay, and control weakness over expenditure processing.

We selected a limited number of fixed assets acquired by expenditures during our audit period to test for accurate reporting in SPA and to verify existence of the assets. We were able to locate all assets and verify accurate tracking in SPA. During the audit period, the Board reported no assets as missing or stolen in SPA.

All state agencies have been requested to evaluate current BRP indicators for accuracy. Incorrect indicators either could cause employees to be over or underpaid for each monthly salary payment depending on leveling choices. The Board reviewed reports and performed the necessary research to correct the BRP indicators for all its employees.

 


Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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