State of Texas Financial Portion of the Statewide Single Audit Report for the Year Ended August 31, 2005
March 2006
Report Number 06-555
Overall Conclusion
The Comprehensive Annual Financial Report (CAFR) for the State of Texas accurately presents the financial position and activities of the State for the year ended August 31, 2005.
The ability to prepare materially correct financial statements represents a significant accomplishment for the State. With the third-largest budget among all 50 states, nearly $77.7 billion in annual expenditures, and more than 200 state agencies and institutions of higher education, the State must contend with significant complexities in preparing its basic financial statements. The financial statements provide a comprehensive picture of how the State used its resources during the year, as well as the State's remaining assets and obligations at the end of the year.
Auditing financial statements is not limited to reviewing the accuracy of the numbers in those statements. Conducting this audit also requires the State Auditor's Office to audit the underlying systems and processes that agencies and institutions of higher education use to record their financial activities. Through that effort, we identified specific weaknesses that certain agencies should correct to ensure the accuracy of their financial information.
The State Auditor's Office conducts this audit so that the State can comply with legislation and federal grant requirements that require it to obtain an opinion regarding the material accuracy of its basic financial statements and a report on internal controls related to those statements. The results of this audit are used primarily by bond-rating agencies that rate newly issued bonds and by federal agencies that award grants.
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The State Auditor's Office's opinion letter regarding the State's basic financial statements is published in the State of Texas Comprehensive Annual Financial Report for the Year Ended August 31, 2005. That report is available on the Comptroller of Public Accounts' Web site.
The State Auditor's Office and KPMG, LLP performed the federal portion of the 2005 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. This report, along with the financial portion of the statewide single audit performed by the State Auditor's Office, is submitted to the federal government to fulfill single audit reporting requirements.