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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Southern University
Fiscal 2010 Fourth Quarter

We audited a sample of Texas Southern University's (University) payroll, purchase, library book, and travel transactions that processed through USAS during the period beginning Sept. 1, 2008, through Aug. 31, 2009.

We audited payroll transactions for compliance with the GAA, the Payroll Guide, and other pertinent statutes. One personnel file was missing a prior state service verification form that resulted in an underpayment of longevity pay.

We audited purchase transactions for compliance with the GAA, Purchase Guide, and other pertinent statutes. In our review of the purchase transactions, we identified both documentation and payment errors. The documentation errors included several vouchers with PO's and a PO change notice created after the invoice was received and one voucher with a PO that was improperly changed after the invoice was received. In addition, two transactions were missing proper documentation necessary to verify that the payments were valid. The payment errors identified included two vouchers with an incorrect amount. Through a separate report generated outside of our sample, we identified one duplicate payment. In addition, the University does not verify warrant holds on vendors for purchases made with local funds, travel and petty cash accounts, and on spot purchases less than $25,000.

We audited the University's compliance with the prompt payment laws and scheduling rules. The University's procedures for calculating its payment due dates do not comply with the statutes. The University uses the date the accounts payable department receives the invoice, instead of the date the invoice is received on its campus. As a result, of the 244 purchase transactions audited, the University paid 128 of these transactions late. We also identified five purchase transactions that paid too early causing a loss of interest to the treasury. During the audit period, the University paid $1,271.31 in late payment interest to vendors from its state treasury funds.

We audited travel transactions for compliance with the GAA, Textravel, and other pertinent statutes. On three transactions, travelers received excessive amounts of reimbursements for lodging and hotel taxes. On another transaction, the University reimbursed a traveler for both mileage and a rental vehicle; and on another travel transaction, a traveler received a duplicate reimbursement for parking expenses.

We reviewed the University's voucher signature cards and electronic approval security effective during our audit period. The security review entailed identifying any of the University's employees with security in USAS, 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 in a timely manner. We identified three employees who retained the ability to expend funds after termination. Two of the three employees also retained the security to expend funds after their authority expired.

We also reviewed the University's internal control structure. Our review was limited to obtaining an understanding of the University'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 University designated one employee with the ability to pick up warrants from the Comptroller's office and approve vouchers without oversight.

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. From assets selected, one replacement item had not been tagged and one item was not located. We also generated a report for SPA disposal. The University reported 356 fixed assets as missing.

We issued a prior post-payment audit of the University's payroll, purchase, and travel transactions on Nov. 14, 2005. The recurring findings from the previous audit were identified as incorrect longevity pay, missing documentation, PO created after invoice, duplicate reimbursement, incorrect amount, payments made past the prompt payment deadline and scheduling, excessive reimbursements, and terminated employees retaining security to expend funds and authority to approve paper vouchers after termination.

Based on the results of this audit we recommend that the University contact the Fiscal Management Division to coordinate specialized training. These specialized training sessions are complimentary and can be tailored to meet the University's needs. Some of the classes offered include Comptroller Expenditure Object Code Workshop, and Expenditure Processing and Documentation (beginning and advanced), Expenditure Approval Process, and Prompt Payment and Payment Scheduling.

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