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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Employees Retirement System of Texas
Fiscal 2010 Second Quarter

We completed a post-payment audit of certain payroll, purchase, and travel transactions of Employees Retirement System of Texas (ERS) that processed through USAS and USPS during the audit period March 1, 2008 through Feb. 28, 2009. We reviewed a detailed sample of transactions for the payroll, purchase, and travel groups and a limited sample for payment cards.

We commend ERS on satisfactorily resolving many of the errors identified during fieldwork. Although we did not identify significant monetary errors, ERS must formally address the following issues: not utilizing set-aside contracts, incorrect amount paid for car rental, prompt payment and scheduling errors, and control weakness over expenditure processing. There were no projections made from these findings due the relatively low dollar amounts in error.

During our audit of ERS, we identified an instance where ERS purchased six clocks from a non-contracted vendor. Varieties of clocks are available through one of the state's set-aside programs, the Texas Industry for the Blind and Handicapped (TIBH). On September 22, 2009, ERS hand delivered a letter to the Comptroller's office that stated that it pays its purchases from trust fund dollars; not appropriated funds. ERS is of the understanding that it has a fiduciary duty to purchase goods and services that offer best value to ERS and at its determination can exempt itself from using the state's set-aside programs. The Comptroller's office states that no agency or university is exempt from purchasing from the state-set aside programs; therefore, the clocks should have been purchased from TIBH.

We would like to acknowledge ERS's compliance in the following areas:

  • We conducted an internal review to find potential duplicate payments and found that ERS did not have any duplicate payments.
  • We selected a limited number of fixed assets acquired by ERS during our audit period. We verified that all of the assets were in their intended location, tagged correctly and properly recorded in SPA.
  • We selected a limited number of payroll deductions to review. All deductions reviewed were properly documented and correct.

In conjunction with our post-payment audit of ERS's expenditures, we reviewed certain limitations ERS placed on its accounting staff members' abilities to process expenditures. We reviewed ERS's security in USAS, USPS, and the Texas Identification Number system (TINS). We noted three situations involving separation of duties that ERS must address. ERS had one employee who could adjust payment instructions in TINS and approve vouchers, one employee who could process and release payrolls, and another employee who could process and release payments through USAS. We ran a report to determine whether any of ERS's payment documents processed through USAS during the audit period because of the action of only one person. There were no documents either entered and approved, or altered and approved, by the same person without another person's electronic oversight during the audit period.

We concluded a prior post-payment audit of ERS's payroll, purchase, and travel transactions on May 31, 2006. There were no recurring issues from the prior audit.

 


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