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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Top 10 Audit Findings in Post-Payment Audits (2014)

1. Compliance with USAS Security Requirements

The issue

Agencies often fail to comply with proper procedures when establishing user accounts in the Uniform Statewide Accounting System (USAS).

Proper procedure

Agency security coordinators must ensure that:

2. Conservation of State Funds (travel)

The issue

Agencies often do not consider cost savings to the State when making travel arrangements.

Proper procedure

Agencies must:

  • Minimize the amount of travel expenses paid or reimbursed by the agency.
  • Ensure each travel arrangement is the most cost-effective, considering all circumstances.
  • Properly train employees on travel regulations to ensure compliance with all applicable regulations and limitations.
  • Maintain the following travel documentation:
    • Travel vouchers
    • Receipts
    • Other travel expense support documents

Find out more

See Textravel — Agency and employee responsibilities.

3. Delegation to Approve Expenditures (internal control structure)

The issue

Agencies do not appropriately update their designation of employees authorized to approve payments. This could lead to unauthorized expenditures and USAS access.

Proper procedure

Agencies must:

  • Notify the Comptroller’s office of a designated employee’s termination no later than the fifth day after the effective date of the termination.
  • Put procedures in place to regularly monitor user accounts and ensure a user’s access privileges remain appropriate for that user’s access needs.

Find out more

See Expenditures Approvals and Certification (FPP B.007).

4. Failure to Identify Whether Payments are Forwarded Outside of the United States (direct deposit)

The issue

Direct deposit authorization forms are often found to be outdated or improperly completed. This could result in noncompliance with federal requirements mandated by the Office of Foreign Assets Control (OFAC) to disclose when funds are distributed outside of the United States.

Proper procedure

Agencies must ensure that:

  • The most current direct deposit forms are being used.
  • Employees are correctly completing the forms.

Find out more

See IAT and TINS IAT Indicator Tutorial — Authorization Forms.

5. Incorrect Longevity Payments (payroll)

The issue

Failure to verify prior state service when hiring employees could lead to incorrect longevity payments. When agencies fail to do proper verification, longevity payments are calculated incorrectly and eligible employees are underpaid for longevity pay.

Proper procedure

When hiring a new employee, agencies must:

  • Determine eligibility for longevity pay by verifying the employee’s prior state service.
  • Ensure the monthly longevity payment amount to be paid to the employee is calculated correctly.

Find out more

See Texas Payroll/Personnel Resource — Longevity Pay.

6. Insufficient Documentation (purchase)

The issue

Lack of or insufficient documentation for purchases is a common audit finding. Without supporting documentation, a purchase and the corresponding data entered into the Uniform Statewide Accounting System (USAS) cannot be validated.

Proper procedure

Agencies must maintain supporting documentation in their files to support the legality and fiscal responsibility of each payment that results from purchase documentation. Examples of required documentation include:

  • Invoice
  • Purchase order (PO)
  • Contract
  • Receiving report (for PO)

Note: A three-way match must be performed on the PO, invoice and receiving report to avoid paying incorrect and fraudulent invoices.

7. Interest on Overdue Payments

The issue

When payments are not distributed by the due date, agencies pay interest on those overdue payments. When agencies enter incorrect due date information in USAS, late payments process without paying interest to vendors.

Proper procedure

Agencies must submit the correct payment due date to the Comptroller’s office. Agencies should review invoices and receiving reports to determine the proper date to use when calculating the payment due date.

Payments are due on the 30th day after the latest of the following:

  • The date goods are received
  • The date the service is completed
  • The date the invoice is received

Agencies should:

  • Correctly enter the computed payment due dates in USAS and
  • Submit payment vouchers through internal accounting systems and USAS with sufficient time to ensure payments are distributed by the due dates.

Find out more

See eXpendit — Prompt Payment.

8. Overpayments of Compensation (payroll)

The issue

Overpayments of compensation occur when:

  • Employee totals for hours worked are not verified and/or
  • Leave hours taken by employee are not properly tracked.

Proper procedure

Agencies should:

  • Review timesheets to ensure employees report actual hours worked.
  • Track employee leave hours and conduct period reconciliations of completed timesheets prior to processing payment of compensation.

9. Payments Not Scheduled

The issue

Payments are improperly scheduled for payment in USAS, which leads to early payment distribution. Processing early payments may not always be beneficial to the agency or the State as it reduces the interest earned on funds held by the State.

Proper procedure

For invoices greater than $5,000, agencies should ensure that payments are not made before the required 30-day scheduling deadline unless it is more cost-effective for the agency and/or State to do so.

Find out more

See eXpendit — Payment Scheduling.

10. Segregation of Duties (internal control structure)

The issue

State employees often have the ability (i.e., security access) to perform multiple tasks in the statewide financial systems such as entering and releasing a payment without oversight. This creates a greater risk to agencies’ funds as there is no technical means for agencies to prevent individuals from releasing a payment.

Proper procedure

Agencies should implement controls over expenditure processing and segregate each task as much as possible.

Agencies can strengthen internal controls and reduce risks to state funds by requesting that:

  • Preventative control be enforced for all of their USAS transactions.
  • They receive the USAS Risky Document Report (DAFR9840) that lists activities for all users, including any documents that were entered or altered and then released by the same user.

Find out more

See USAS Accounting and Payment Control (FPP B.005).

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