Skip to main content

The Audit of the Employees Retirement System’s Fiscal Year 2017 Financial Statements

December 2017

Summary Analysis

In our audit report dated December 20, 2017, we concluded that the Employees Retirement System’s (System) basic financial statements for fiscal year 2017 were materially correct and presented in accordance with accounting principles generally accepted in the United States of America. The System published our audit report as part of its basic financial statements, which it intends to post on its Web site at www.ers.texas.gov.

 Jump to letter


We also issued a report on internal control over financial reporting and on compliance and other matters as required by auditing standards (that report, including responses from management, is presented in the attachment to this letter). In that report, auditors reported the System had material accounting errors in the financial statements for the System’s active and retiree insurance plans and that the System did not properly implement part of a new accounting standard.

 Jump to report on internal control and compliance


Auditors conducted census data testing for fiscal year 2017 as part of this audit. Please see the report for a description of the additional work performed.

 Jump to report


The Employees Retirement System’s (System) fiscal year 2017 financial statements had material accounting errors in the proprietary fund related to (1) inappropriately reporting the net position of the retiree insurance plan as an asset in the active insurance plan, (2) lacking support for a loan between insurance plans, and (3) inappropriately applying a change in an accounting estimate retroactively.

Additionally, the System did not properly implement part of a new standard, Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, related to its special funding situation in the fiduciary fund.

Jump to Finding 

 Read Full Letter