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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Water Development Board
Fiscal 2010 Third Quarter

We audited a sample of the Texas Water Development Board's (Board) payroll, purchase and travel transactions and a limited sample of non-overnight travel, grant and payment cards transactions that were processed through the Uniform Statewide Accounting System (USAS) and the Uniform Statewide Payroll/Personnel system (USPS) during the period beginning June 1, 2008, through May 28, 2009.

We reviewed payroll transactions for compliance with the General Appropriations Act (GAA), State of Texas Payroll Policies and Procedures Guide (Payroll Guide) and other pertinent statutes. Our audit of the Board's payroll identified five employees with incorrect state effective service information in USPS. Three employees were underpaid longevity pay and two employees were overpaid longevity pay. Two personnel files were missing the verification of prior state service and three personnel files were missing personnel action forms (PAF). We also identified one transaction outside our sample where an employee was paid a recruitment bonus and was terminated before completing the requirements. The Board, however, did not recoup the outstanding amount upon termination.

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. Two purchase transactions had purchase amendments that were created after the invoice was received or service rendered.

We reviewed payment card transactions for compliance with the GAA, the Purchase Guide and Procurement Manual and other pertinent statutes. We did not identify any errors in the payment card transactions.

We reviewed travel transactions for compliance with the GAA, Textravel, the Travel Regulations Act and other pertinent statutes. We did not identify any errors in the travel transactions.

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, the Board reported one missing asset. However, the asset was discovered and verified during the course of the audit.

The audit included a review of the Board's compliance with the prompt payment laws and scheduling rules. We identified two purchase transactions and one travel transaction that were paid late, where interest should have been paid but was not. We also identified ten payment card transactions that were paid early resulting in loss of interest to the Treasury.

We 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 four employees who could adjust payment instructions in TINS and approve vouchers without oversight. Three of the four employees could also process and release payments through USAS, and two of the four employees could process and release payments between internal system and USAS.

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 the Board's procedures for awarding grants; therefore, we are not offering an opinion on those procedures.

We concluded a prior post-payment audit of the Board's payroll, purchase and travel transactions on March 14, 2006. During the current audit, the recurring errors are incorrect payment of longevity pay, prompt payment and payment scheduling issues and control weakness over expenditure processing.

Glenn Hegar
Texas Comptroller of Public Accounts
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