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A Follow Up Audit Report on Internal Controls and Financial Processes at the Texas Cosmetology Commission

February 2005

Report Number 05-027

Overall Conclusion

Additional improvements are needed for the Texas Cosmetology Commission (Commission) to discharge its fiscal obligations in a timely manner, properly manage its assets, and keep adequate fiscal records. The Commission has shown minimal improvement in addressing the findings identified in An Audit of Internal Controls and Financial Processes at the Cosmetology Commission (SAO Report No. 04-019, February 2004). The Commission has a number of control weaknesses in its financial systems that allow errors and violations of laws and regulations. Additionally, data integrity issues and missing data fields in the Commission's computer system hamper the Commission efforts to capture reliable information. Although the Commission has implemented a number of recommendations, the ones that have been minimally implemented significantly affect its operations.

Because of the significance and persistence of the issues and the Commission inability to develop a long-term financial plan, we recommend that the Commission outsource all of its financial processes if it continues to exist in whole or in part. The Commission can outsource these processes to another state agency, such as the Office of the Comptroller of Public Accounts, or to a private accounting firm.

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