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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Office of the Secretary of State
Fiscal 2011 First and Second Quarter

We audited a sample of the Office of the Secretary of State’s (Office) payroll, purchase, travel, refund and grant transactions that processed through USAS and USPS during the period beginning June 1, 2009, through May 31, 2010.

We audited payroll transactions for compliance with the GAA, the Payroll Guide, and other pertinent statutes. We did not note any findings in this group.

We audited purchase transactions for compliance with the GAA, eXpendit, the Procurement Manual, and other pertinent statutes. In our review of the purchase transactions, we did not note any findings, with the exception of the prompt payment/scheduling findings described below.

We audited the Office’s compliance with the prompt payment law and scheduling rules. In our sample, we found one purchase and three travel transactions where interest was lost to the state because the Office paid the vendor too early. We also found six purchase and one travel transaction that did not properly pay prompt payment interest. During the audit period, the Office paid $19.42 in prompt payment interest.

We audited travel transactions for compliance with the GAA, Textravel, the Travel Regulation Act and other pertinent statutes. We did not note any payment or documentation findings in this group.

We conducted a limited review of the Office’s transactions relating to grant payments. This review consisted of verifying that the payments did not exceed the authorized amounts. We did not identify any errors in the payments reviewed. The review of these payments did not include an investigation of the Office’s procedures for awarding the grants or monitoring payments made to grantees; therefore, we are not offering an opinion on those procedures.

Our audit included a limited review of the Office’s transactions relating to refunds of revenue. The review consisted of verifying that the documentation provided reconciled with the payment amount in our sample. We did not identify any payment or documentation errors in these transactions.

We reviewed the Office’s internal control structure. Our review was limited to obtaining an understanding of the Office’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 Office had designated one employee with multiple security capabilities that allowed them to process payments 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. We were able to locate all assets and verify accurate tracking in SPA. During the audit period, the Office reported two capital assets as either missing, lost, or stolen with a net book value of $321.56.

We issued a prior post-payment audit of the Office’s purchase, travel, and payroll transactions on May 8, 2007. The current audit error rate shows that the Office has improved in the payroll area, and maintained its performance in the purchase and travel areas. Two findings from the previous audit: prompt payment and payment scheduling issues and control weakness over expenditure processing were also identified in the current audit.

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