An Audit Report on Selected State Contracts and Grants at the Harris County Department of Education
Report Number 16-004
The Harris County Department of Education (Department) had controls in place to help ensure that it received and used funds from state grants and contracts for the intended purposes. The Department generally complied with applicable terms and conditions, policies and procedures, and state laws when tracking and spending those funds. In addition, the Department spent property tax revenue it collected in accordance with applicable state laws.
However, auditors identified opportunities for the Department to improve its management of its contract for the Texas Virtual School Network. The Department was not able to provide documentation for the allocation of $360,906 in funding for salaries and $86,315 in funding for building improvements to house the Texas Virtual School Network in fiscal years 2012 and 2013.
The Department also paid its employees stipends in addition to their regular salaries without submitting all of the stipends to its board of trustees for review, as required by the board of trustees compensation and benefits policy. Of the $472,575 in stipend payments tested, the Department did not submit $189,845 of those payments to the board of trustees. In total, the Department made $871,610 in stipend payments from fiscal year 2012 through fiscal year 2014.
In addition, the Department did not adequately manage user access to its financial system. As a result, two employees had inappropriate access to one of the Department's systems, which circumvented controls related to segregation of duties. In addition, the Department did not restrict physical access to certain areas to only those employees who needed access to perform their job responsibilities.
Auditors communicated other, less significant issues separately in writing to the Department.
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