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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Department of Family and Protective Services
Fiscal 2010 Third Quarter

We audited a sample of the Texas Department of Family and Protective Service's (DFPS) payroll, purchase and travel transactions processed through the Uniform Statewide Accounting System (USAS) and the Standardized Payroll/Personnel Reporting System (SPRS) during the period beginning Sept. 1, 2007, through Aug. 31, 2008. We also reviewed a limited sample of contracted services, grants, payment card, and telecommunication transactions.

We reviewed payroll transactions for compliance with the General Appropriations Act (GAA), the State of Texas Payroll Policies and Procedures Guide (Payroll Guide) and other pertinent statutes. Our audit of DFPS's payroll identified four employee personnel files that were missing prior state service information in SPRS. Once DFPS corrected the prior state service information, the state effective service dates for these employees changed which resulted in underpayments of longevity pay. We also identified two employees who were paid incorrect amounts of lump sum vacation pay.

We reviewed purchase transactions for compliance with the GAA, State of Texas Purchase Policies and Procedures Guide (Purchase Guide), State of Texas Procurement Manual (Procurement Manual) and other pertinent statutes. The findings were missing purchase orders, purchase orders created after the goods/services were received, incorrect amount paid on invoice, missing invoices, and missing meal receipts for wards of the state. We also identified the following deficiencies in the payment card process regarding purchase of office supplies from P.D. Morrison Enterprises (PDME) transactions: missing invoice and receiving documentation for purchases using payment cards, lack of controls over goods received, term contracts not utilized, and best value not received for the state.

We reviewed travel transactions for compliance with the GAA, Textravel, the Travel Regulations Act and other pertinent statutes. In our review of the travel transactions, we identified lodging paid in excess of maximum allowed amounts, contract rental car rate not utilized, incorrect mileage reimbursement rate resulting in an underpayment to traveler, and incorrect mileage calculations. We also noted that the mileage on travel vouchers was rounded on a daily basis resulting in an overall overpayment of mileage.

The audit included a review of DFPS's compliance with the prompt payment law and scheduling rules. We identified 26 purchase, 13 travel and one contracted services transactions that were paid early. We also identified 17 purchase transactions where interest should have been paid but was not. In addition, two purchase transactions paid prompt pay interest to the vendor in excess of the amount due, while one purchase transaction did not pay the sufficient amount of late interest due to the vendor.

We reviewed DFPS's voucher signature cards and electronic approval security effective during our audit period. The security review entailed identifying any employees with security in USAS, SPRS, the Texas Identification Number System (TINS) 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. There was one termination during the audit period in which DFPS failed to notify the Comptroller's office. As a result, the employee retained the ability to approve paper vouchers after termination, and remained listed on the DFPS's voucher signature cards for 945 days after termination.

We also reviewed DFPS's internal control structure. Our review was limited to obtaining an understanding of DFPS'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 lack of separation of duties. DFPS had five employees who could process and release transactions through USAS without oversight, and two employees with the ability to adjust payment instructions in TINS and approve paper vouchers.

We selected a limited number of fixed assets acquired by expenditures during our audit period to test for accurate reporting in the State Property Accounting System (SPA) and to verify existence of the assets. We were able to locate all assets and verified the recording of the assets in SPA. During the audit period, there were 41 missing and one stolen assets with a total net book value of $3,642.08. DFPS provided the police reports for the stolen asset.

We conducted a limited review of the grant transactions to ensure that the payment amount matched the authorized amount. We did not identify any errors. The review of these payments did not include an investigation of DFPS's procedures for awarding grants; therefore, we are not offering an opinion on those procedures.

All state agencies received a request to evaluate current benefit replacement pay (BRP) indicators for accuracy. Incorrect indicators could cause employees to be over or underpaid for each monthly salary payment depending on leveling choices. In order to assist in this process, the Comptroller provided various reports to DFPS. A review of the BRP Indicator Evaluation Report dated Dec.8, 2009, showed 307 potentially incorrect BRP indicators. DFPS must research and/or correct these indicators to assure the correct processing of payrolls in the future.

We concluded a prior post-payment audit of DFPS's payroll, purchase, and travel transactions on Dec. 8, 2004. The current audit shows that DFPS had many of the same errors. The recurring errors were incorrect longevity pay amounts, missing purchase documentation, purchase orders created after receipt of invoice, incorrect payment amount for goods purchased, payment and scheduling issues, incorrect mileage, employee retaining abilities to expend funds after termination date, and control weakness over expenditure processing.

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