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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Railroad Commission of Texas
Fiscal 2012 Fourth Quarter

Audit scope

A sample of the Railroad Commission of Texas’ (Commission’s) payroll, purchase, grant, payment card and travel transactions that processed through the Uniform Statewide Accounting System (USAS) and Uniform Statewide Payroll/Personnel System (USPS) during the period beginning March 1, 2011 through Feb. 29, 2012, 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), Texas Payroll/Personnel Resource and other pertinent statutes.

  • No issues were identified.

A limited sample of voluntary contributions was also audited.

  • No issues were identified.

Purchase transactions

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

The audit identified:

  • Two purchase transactions were duplicate payments for the same invoices submitted by vendors.
  • One improper payment of taxes/surcharges was made.

Prompt payment and payment scheduling

The Commission’s compliance with the prompt payment law and scheduling rules was audited.

The audit identified:

  • Thirteen purchase transactions, three payment card transactions and two travel transactions paid late where interest was not paid to the vendors.
  • Five payment card transactions paid early resulting in interest loss to the State Treasury.

Payment card transactions

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

The audit identified:

  • The Commission failed to document the required vendor hold check for 15 payment card purchases over $500.

Travel transactions

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

  • Except for the transactions mentioned in the prompt payment schedules, no issues were identified.

Grant transactions

The audit included a limited review of the Commission’s transactions relating to grant payments. This review consisted of verifying that payments did not exceed authorized amounts. 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, no opinion on those procedures is being offered.

  • No issues were identified.

Internal control structure

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

The audit identified:

  • Two employees who can pick up warrants from the Comptroller’s office and approve vouchers.
  • The Commission did not maintain a signed Confidential Treatment of Information Acknowledgement (CTIA) form prior to granting access to the state systems for one employee.

Fixed assets

The audit included a limited number of fixed assets acquired by expenditures during the audit period to test for accurate reporting in the State Property Accounting (SPA) System and to verify existence of the assets.

The audit identified:

  • All assets tested were in their intended location and properly recorded in SPA.
  • The Commission had two missing or stolen assets reported to SPA with a total net book value of $345.70 during the audit period.

Direct deposit authorization forms

A review was conducted of the Commission’s procedures to comply with the federal mandate to properly identify and handle payments involving the movement of funds internationally.

The audit identified:

  • Nine instances where an outdated version of the direct deposit setup form was used that did not adhere to the National Automated Clearing House Association (NACHA) rules requiring the identification of a direct deposit payment if it is an International Automated Clearing House Transaction (IAT).

Prior post-payment audit and current audit recurring errors

A prior post-payment audit of the Commission’s payroll, purchase and travel transactions was concluded on Oct. 24, 2008.

During the current audit, there were two recurring errors:

  • Prompt payment and payment scheduling issues.
  • Control weakness over expenditure processing.
Glenn Hegar
Texas Comptroller of Public Accounts
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