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An Audit Report on the Texas Board of Architectural Examiners: A Self-directed, Semi-independent Agency

December 2011

Report Number 12-009

Overall Conclusion

The Texas Board of Architectural Examiners (Agency) accurately reported key financial statement balances for fiscal year 2010, and its key financial controls were working effectively. However, it did not maintain sufficient financial documentation to support a transfer of $83,177 from its scholarship fund to its operating fund during fiscal year 2010.

The Agency transferred $3,785,600 to the State's General Revenue Fund during fiscal year 2010, as required by Texas Civil Statutes, Article 8930, and its fiscal year 2010 ending fund balance was $2,419,439, which represents an increase of $394,241 (19 percent) from its fiscal year 2006 ending fund balance. The Agency's ending fund balance included the scholarship fund balance of $219,883.

The Agency had an adequate process for setting fees. That process included analyzing costs to help ensure that the Agency meets its operational needs. However, while the Agency collected sufficient revenue in fiscal year 2010 to cover its operational expenses, the Agency's budgeting process was not sufficient to fairly project Agency revenues and expenditures and the process was not fully documented. This limits the ability of the Agency's governing board to determine whether it should make adjustments to the Agency's fee structure or operating costs. The Agency also presented budget information to its governing board, the Legislature, the Office of the Governor, and the Legislative Budget Board that significantly understated the Agency's projected available ending fund balances.

The Agency had an adequate process for setting administrative penalties. That process ensured that administrative penalties conformed with and were consistently applied in accordance with the Texas Administrative Code and the Texas Occupations Code.

In addition, the Agency implemented policies and procedures in January 2011 regarding its fee-setting process as recommended in An Audit Report on the Texas Board of Architectural Examiners: A Self-directed, Semi-independent Agency (State Auditor's Office Report No. 10-003, September 2009). However, the Agency has not fully documented policies and procedures related to its administrative penalty assessment process as that audit report recommended.

The Agency reported inaccurate performance measure results in its reports to the Legislature and the Office of the Governor in fiscal year 2010 for three of four performance measures tested. Those measures were:

- Number of Examination Candidates.

- Number of Individual Licenses Renewed and Those Renewed Online.

- Number of Complaints Resolved.

The Agency accurately reported performance measure results for the Number of New Individual Licenses Issued. Auditors followed up on an additional performance measure--Number of Individuals Examined--that the State Auditor's Office reported as inaccurate in the September 2009 audit report. The Agency did not report results for that performance measure in fiscal year 2010.

The Agency lacked adequate policies and procedures to ensure that it accurately calculated and consistently reviewed and reported performance measures results. In addition, the Agency had not implemented four of five recommendations related to performance measures included in the September 2009 audit report. The Agency had partially implemented one recommendation related to performance measures.

Auditors communicated other, less significant issues to Agency management separately in writing.

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