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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Department of Transportation
Fiscal 2011 Fourth Quarter

Audit scope

A sample was audited of the Texas Department of Transportation’s (Department’s) payroll, purchase and travel transactions processed through the Uniform Statewide Accounting System (USAS) and the Uniform Statewide Payroll/Personnel System (USPS) during the period beginning Dec. 1, 2009 through Nov. 30, 2010.

A limited audit was also conducted of highway construction contracts, payment cards, payroll deductions, revenue refunds and grant transactions.

Each transaction was audited to determine compliance with applicable state laws.

Payroll transactions and deductions

Payroll transactions were audited for compliance with the General Appropriations Act (GAA), the Texas Payroll/Personnel Resource and other pertinent statutes.

The audit of the Department’s payroll transactions identified the following:

  • Instances of missing prior state service verifications resulting in incorrect service dates and underpayments of longevity pay
  • Nine payroll transactions totaling $10,270.73 where the transactions exceeded the amount due to the employee. The Comptroller’s Statewide Human Resource and Payroll Assistance section reviewed all nine transactions and adjustments were made to resolve the entries prior to the start of fieldwork.

Additionally, a limited review of the Department’s payroll deductions was conducted.

  • No errors were identified in the sample of payroll deductions reviewed.

Refunds of revenue

We conducted a limited review of the Department’s refund of revenue transactions. This review consisted of verifying that refund amounts did not exceed authorized amounts.

  • No errors were identified in the refunds reviewed.

Purchase transactions

Purchase transactions were audited for compliance with the GAA, eXpendit, the State of Texas Procurement Manual and other pertinent statutes.

The following were identified:

  • Three purchase transactions with errors
  • Two Purchase Orders (POs) created after the invoice was received with one paying a vendor an incorrect amount
  • One duplicate payment totaling $13,830.60

Prompt payment law and scheduling rule

The Department’s compliance with the prompt payment law and scheduling rule was audited.

The following were identified:

  • $91,876.03 in prompt payment interest paid by the Department during the audit period
  • Six purchase and two travel transactions in which interest was lost to the state because the Department paid the vendor too early
  • Seven purchase and three travel transactions that did not properly pay prompt payment interest
  • One purchase transaction in which interest was overpaid to the vendor

Transactions relating to highway construction contract payments

The audit included a limited review of the Department’s transactions relating to highway construction contract payments.

  • No payment or documentation errors were identified in these transactions.

Travel transactions

Travel transactions were audited for compliance with the GAA, Textravel and other pertinent statutes.

  • No errors were identified in the travel transactions reviewed.

Grant payments

A limited review of the Department’s grant payments was conducted. This review consisted of verifying that payments did not exceed authorized amounts.

  • No errors were identified in the payments reviewed.

The review of these payments did not include a review of the Department’s procedures for awarding these payments or monitoring payments to the grantees; therefore, no opinion on those procedures is being offered.

Payment card transactions

Payment card transactions were audited for compliance with the GAA, eXpendit, the State of Texas Procurement Manual and other pertinent statutes.

  • No payment or documentation errors were identified in these transactions.

Security

The Department’s voucher signature cards and electronic approval security were reviewed, effective during our audit period.

The security review entailed identifying any employees with security in USAS, USPS, the Texas identification Number System (TINS) or on the voucher signature cards that were no longer employed or whose security had been revoked. Upon termination or revocation, the Department must observe certain deadlines so that security is revoked in a timely manner.

The following were identified:

  • One employee who retained the ability to expend funds after termination
  • A Department employee who remained on the signature cards 141 days after termination

Internal control structure

The Department’s internal control structure was reviewed. The review was limited to obtaining an understanding of the Department’s controls sufficient to plan the audit and did not include tests of control policies and procedures.

The following was identified:

  • One employee had the ability to adjust payment instructions in TINS and approve vouchers.

Fixed assets acquired by expenditures

Ten fixed assets acquired by expenditures during the audit period were selected.

  • The ten assets were located and accurate recording of the assets in the State Property Accounting System (SPA) verified.

The following was also noted:

  • During the audit period, the Department had 199 missing or stolen assets reported to SPA with a total net book value of $74,317.17. The police reports for all the stolen assets were reviewed.

Prior post-payment audit and current audit recurring errors

A prior post-payment audit of the Department’s payroll, purchase, payment cards, grants, highway construction contracts and travel transactions was issued on Feb. 7, 2005.

During the current audit, five recurring errors were identified:

  • Incorrect longevity pay
  • PO created after invoice
  • Incorrect amounts paid
  • Prompt payment and payment scheduling errors
  • Control weakness over expenditure processing

Follow-up reports were also issued that isolated payment cards transactions on May 31, 2007, and again on March 24, 2009.

  • No recurring errors were identified for the payment card transactions.
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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