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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Commission on the Arts
Fiscal 2011 First and Second Quarter

We audited a sample of Texas Commission on the Arts’ (Commission) payroll, purchase, travel, 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 identified two employee files that were missing prior state service verifications. One of them resulted in an underpayment of longevity pay. We also identified one payroll transaction that was missing the required new hire documentation.

We reviewed purchase and payment card transactions for compliance with the GAA, eXpendit, the Procurement Manual, and other pertinent statutes. Seventeen transactions did not include the total costs for the purchases, unit prices, or quantities on the purchase orders. We noted five instances in which an incorrect amount was paid to the vendor. We also identified one transaction where the Commission created the purchase order after the invoice was received and one transaction where the Commission failed to obtain the exemption from the Department of Information Resources before purchasing information technology services. Two documents reviewed were missing the documentation necessary to determine if the payments were valid.

We ran a report to identify the payment card transactions made by the Commission for the audit period. In our payment card review, we identified one transaction missing purchase documentation and another instance of state sales tax paid.

We reviewed the Commission’s compliance with the prompt payment law and scheduling rule. During the audit period, the Commission did not pay prompt payment interest to its vendors. One purchase transaction was not properly scheduled resulting in interest lost to the state treasury. In addition, the Commission did not pay interest on three purchase transactions and four travel transactions where interest was due.

We audited travel transactions for compliance with the GAA, Textravel, and other pertinent statutes. We identified two travel reimbursements missing supporting documentation. We identified one transaction where an excessive amount was paid for a car rental and gratuity was reimbursed in another transaction. We also identified four transactions where the state hotel taxes were incorrectly coded.

We conducted a limited review of the Commission’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 Commission’s procedures for awarding the grants or monitoring payments made to grantees; therefore, we are not offering an opinion on those procedures.

We also conducted a security review that entailed identifying any of the Commission’s employees with security in USAS or USPS or on the voucher signature cards who terminated employment or whose security had been revoked. Upon termination or revocation, the Commission must observe certain deadlines to revoke security. The Commission failed to ensure that the Comptroller’s office received notification in a timely manner about the termination of one employee listed on the Commission’s signature cards.

We also reviewed the Commission’s internal control structure. Our review was limited to obtaining an understanding of the Commission’s controls sufficient to plan our audit and did not include tests of control policies and procedures. We identified two employees with security to perform multiple tasks without oversight.

As a routine part of our security review, we reviewed the Commission’s compliance with the timely completion and retention of the CTIA form. The Commission did not obtain a signed CTIA form timely for five employees.

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. One asset was not properly recorded in SPA and the Commission updated the system after the verification during the fieldwork.

We issued a prior post-payment audit of the Commission’s payroll, purchase, travel, grant and refund of revenue transactions on June 29, 2007. Several findings from the previous audit were also identified in the current audit. The recurring findings were: incorrect longevity payment, missing payroll documentation, state hotel tax incorrectly coded, improper payment of gratuities, improper payment of sales tax, prompt payment and scheduling issues, and control weakness over expenditure processing.

Glenn Hegar
Texas Comptroller of Public Accounts
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