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Multiple Agencies

An Audit Report on the 1997 Financial and Compliance Audit Results

June 1998

Report Number 98-041

Key Facts and Findings

The statewide audit indicates the State has generally complied with federal, state, and bond laws and regulations that specify how funds can be used. Also, the information contained in the financial statements in Texas' 1997 Comprehensive Annual Financial Report (CAFR) accurately represents the State's financial activity and balances at year end.

Material weaknesses in controls exist at two universities. A material weakness means that material errors could occur and not be detected and corrected.

  • Texas Southern University continues to have a material weakness in the controls over the Student Financial Assistance Office.
  • The University of Texas at Tyler has a material weakness in controls over the Student Financial Aid Office

Material noncompliance exists for the State of Texas. The State of Texas, as related to student financial assistance, continues to be in material noncompliance with one federal requirement regarding the reporting of enrollment changes in the Federal Family Education Loans program (CFDA 84.032). Current and prior year audit results indicate that enrollment changes continue to be a problem at many universities. This statewide material noncompliance is the result of enrollment change reporting errors at seven of the ten universities tested. Material noncompliance with federal requirements occurs when errors exceed predetermined error levels.

Prior issues of material noncompliance have been corrected. The Commission on Alcohol and Drug Abuse and the Department of Protective and Regulatory Services have corrected the issues of material noncompliance with federal requirements that were previously reported by the State Auditor's Office.

Prior material weakness has been corrected. The Department of Human Services has corrected the material weakness in internal controls over the Food Distribution program (CFDA 10.550).

Efforts improve accountability to the State. The Comptroller of Public Accounts and the State Auditor's Office reviewed agencies' compliance with reporting requirements issued by the Comptroller. Agencies' responses to this joint effort resulted in no agencies with significant problems with their fiscal year 1997 Annual Financial Reports.

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