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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Management Post-Payment Audit Report Summary
Texas Department of Public Safety
Fiscal 2013 First Quarter

Audit scope

Samples of the Texas Department of Public Safety’s (Department’s) purchase transactions including procurement, grants and payment card transactions that processed through the Uniform Statewide Accounting System (USAS) during the period from Sept. 1, 2010 through Feb. 29, 2012 were audited to determine compliance with applicable state laws.

Purchase transactions

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

The audit identified:

  • Deficiencies in the procurement process which resulted in:
    • Excessive payments.
    • A contract not posted on the Electronic State Business Daily.
    • Two purchase orders created after invoice.
    • Internal policy not being followed.
  • Missing documentation.
  • Payments made past the prompt payment deadline and payment scheduling issues.

Grant transactions

A limited review of the Department’s transactions relating to grant payments was conducted as a part of the purchase sample. This review consisted of verifying that the payments did not exceed the authorized amounts. No errors were identified in the payments reviewed.

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

Payment card transactions

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

The audit identified:

  • Deficiencies in the payment card process.
  • Inadequate documentation for payment cards.
  • Improper payment method of expenditures.

Duplicate payments

A report was generated to identify potential duplicate payments processed by the Department for the audit period. Seven duplicated payments were identified. The total amount of confirmed overpayments was $1,849.58.

Prior post-payment audit and current audit recurring errors

A prior post-payment audit of the Department’s payroll, purchase and travel transactions was concluded on May 27, 2011.

During the current audit, there was one recurring error:

  • Prompt payment and scheduling errors.

Other auditor observations

Pursuant to 34 Texas Administrative Code, Section 20.41(h), state agencies shall formulate an agency procurement plan that identifies an agency's management controls and purchasing oversight authority in accordance with the policy guidance contained in the Procurement Manual.

An agency must submit a copy of the procurement plan to the Comptroller’s office by Nov. 30 of each fiscal year. The Department has not submitted its fiscal 2012 procurement plan.

Agency-provided background

Pursuant to the 2008 Sunset Review and a subsequent management study, the Department made extensive changes to its operations starting in mid-2009.

As part of those changes, the Department’s support functions were given equivalent status to law enforcement divisions on the organization chart. Procurement was moved from the Accounting and Budget Control office to Administration. The budget, cash receiving, grants, payroll and accounts payable functions became the Finance Division.

Responsibility for managing division budgets was delegated (for the first time) to division managers while oversight and governance was retained in Finance. Because the Department lacked funding to centralize and expand the Procurement function, Department divisions were still allowed to sign limited contracts and make limited purchases.

The Department also established a Contract Review Board to provide greater oversight and transparency as well as approval limits. In May 2010, the agency hired an internal auditor and established the Chief Auditor’s Office (CAO). CAO established a charter, hired staff and has completed more than 40 audits since mid-2010.

In 2012, the Department implemented a Portfolio Management Office to review all procurements and provide additional reviews and prioritization for procurements related to significant projects. The Portfolio Management Office also tracks the resource allocation and progress of priority projects.

All procurement must now be handled within Administration’s Procurement and Contracting Office, and division chief signature authority has been reduced by 80 percent. The Department is currently working to double procurement resources so that all purchases and contracts are administered by the Department’s Procurement and Contract Office.

All contracts must be executed by the Director or one of the two Deputy Directors. Additionally, the Office of General Counsel is now an active participant in all stages of contracting for the agency. Procurement, the Portfolio Office and Office of General Counsel continue to work in unison to refine policies and processes as well as train staff on procurement and contracting best practices.

The Department became an internal USAS agency on Sept. 1, 2011 and has stopped using its 26-year-old internal system. The lack of automation and limited reporting capabilities make the administration of certain controls difficult and inefficient. Automation for procurements, travel vouchers and human resource functions would improve routing, tracking and accountability. The agency is also working with a new fuel card vendor to establish better controls over fuel purchases.

Glenn Hegar
Texas Comptroller of Public Accounts
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