State of Texas Financial Portion of the Statewide Single Audit Report for the Year Ended August 31, 2009
March 2010
Report Number 10-555
Overall Conclusion
The basic financial statements presented in the Comprehensive Annual Financial Report (CAFR) for the State of Texas present fairly, in all material respects, the financial position and activities of the State for the fiscal year ended August 31, 2009. These financial statements provide a comprehensive disclosure of the State's use of resources during the fiscal year and a picture of the balance of assets and obligations at the end of the fiscal year.
The State successfully contends with significant complexities in preparing its basic financial statements. Compiling financial information and ensuring its accuracy for more than 200 state agencies and higher education institutions is a major undertaking. The financial statements convey the use of nearly $109.2 billion during the fiscal year.
Auditing financial statements is not limited to reviewing the numbers in those statements. Conducting this audit also requires the State Auditor's Office to obtain a sufficient understanding of the agencies and higher education institutions, including the controls over systems and processes that agencies and higher education institutions use to record their financial activities, to assess the risk of material misstatement of the financial statements. Through that effort, auditors identified specific weaknesses that five agencies and four higher education institutions should correct to improve the reliability of their financial information.
The State Auditor's Office also audited the State's Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2009, which is prepared by the Office of the Comptroller of Public Accounts (Comptroller's Office) using SEFA data from all state agencies and higher education institutions that made federal expenditures during the fiscal year. The State Auditor's Office and KPMG LLP audited the processes for preparing SEFA information at 16 agencies and 21 higher education institutions. Auditors identified errors caused by inadequate review of SEFA information at 9 agencies and 17 higher education institutions. These errors are discussed in Chapter 1-J of this report.
The State Auditor's Office conducts this audit so that the State can comply with legislation and federal grant requirements to obtain an opinion regarding the fair presentation of its basic financial statements and a report on internal controls related to those statements. The results of this audit are used primarily by companies that review the State's fiscal integrity to rate state-issued bonds and by federal agencies that award grants.
The State Auditor's Office's opinion regarding the State's basic financial statements is published in the State of Texas Comprehensive Annual Financial Report for the Year Ended August 31, 2009, which is available on the Comptroller of Public Accounts' Web site.
The State Auditor's Office and KPMG, LLP performed the federal portion of the 2009 statewide single audit. The federal portion included a review of compliance and controls over the State's federal awards and an audit of the Schedule of Expenditures of Federal Awards. The reports from the federal portion and the financial portion are submitted to the federal government to fulfill Single Audit reporting requirements.
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