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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Department of Savings and Mortgage Lending
Fiscal 2010 Second Quarter

We audited a sample of payroll, purchase, and travel transactions for the Texas Department of Savings and Mortgage Lending (Department) that processed through USAS and USPS during the period beginning Sept. 1, 2008, through Aug. 31, 2009. We reviewed a stratified random sample of the population of all payroll, travel, purchase transactions, and procurements methods processed during the audit period.

We commend the Department on resolving most of the errors identified during fieldwork. Although we did not identify significant monetary or documentation errors, the Department must formally address the following issues: control weakness over expenditure processing, employees retaining ability to expend funds after termination, and missing personnel action forms. No projections were made from the audit findings due to the relatively low dollar amounts in error.

We would like to acknowledge the Department’s achievements in the following areas:

  • We generated a report to identify potential duplicate payments. We identified none.
  • In our review of the purchase transactions, we did not identify any errors.
  • A review of the BRP Indicator Evaluation Report shows that the Department has corrected all indicators.
  • We reviewed SPA and the Fixed Asset reports for the audit period. All acquisitions were properly documented and correctly entered into SPA.
  • No prompt payment or scheduling issues were identified during the period.

In conjunction with the audit, we reviewed the Department’s voucher signature cards and electronic approval security effective during our audit period. The security review entailed identifying any of the Department’s employees with security in USAS, USPS, or on the voucher signature cards who were no longer employed or whose security had been revoked. Upon termination or revocation, certain deadlines must be observed so that security can be revoked. The Department had two employees who terminated during the audit period and the security/approval authority was not removed in a timely manner.

We also reviewed the Department’s internal control structure. Our review was limited to obtaining an understanding of the Department’s controls sufficient to plan our audit and did not include tests of control policies and procedures. We noted a situation involving the internal control structure and its operation that must be addressed. We identified two employees with multiple security capabilities to process payments without oversight. We ran a report to identify documents processed due to the action of only one employee. The report did not identify any instances.

We concluded a prior post-payment audit of the Department’s payroll, travel, and purchase on Sept. 6, 2006. We encountered only minor compliance issues then. In this current audit, we recognized only one recurring issue from the prior audit: control weakness over expenditure processing.


Glenn Hegar
Texas Comptroller of Public Accounts
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