A Review of State Agency, University, and Community College District Compliance with the Public Funds Investment Act and Investment Reporting Requirements
March 2008
Report Number 08-023
Overall Conclusion
Most state agencies, universities, and community college districts fully or substantially complied with the Public Funds Investment Act (Act) in fiscal year 2007. Most universities and community college districts also fully or substantially complied with higher education investment reporting requirements mandated by the General Appropriations Act (80th Legislature, Rider 5, page III-224) in fiscal year 2007.
With $56 billion in investments as of August 31, 2007, it is important that these organizations comply with statutes and investment reporting requirements designed to help the Legislature, the organizations' boards, and the general public ensure that these organizations manage and disclose their investments appropriately. The following describes compliance by type of organization for fiscal year 2007:
- Agencies. The 12 state agencies subject to the Act were in full or substantial compliance with the Act.
- Universities. Of the 15 universities subject to the Act, 13 were in full or substantial compliance with the Act. Two universities--Texas Southern University and Texas Woman's University--were in minimal compliance with the Act. All of the universities were in full or substantial compliance with the higher education investment reporting requirements.
- Community college districts. Of the 50 community college districts subject to the Act, 46 were in full or substantial compliance with the Act. One community college district--Alamo Community College District--was in minimal compliance with the Act. Three community college districts--Brazosport College District, Clarendon College, and Ranger College--did not comply with the Act because they did not provide acceptable compliance audits.
Forty-three of the 50 community college districts were in full or substantial compliance with the higher education investment reporting requirements. Two community college districts--Austin Community College District and Ranger College--did not post their investment reports, current investment policies, and other required disclosures on their Web sites and, therefore, were non-compliant. Five community college districts--McLennan County Junior College, Navarro College, Panola College, Texarkana College, and Wharton County Junior College District--were minimally compliant with the higher education investment reporting requirements.
- Universities exempt from the Act but still subject to the higher education investment reporting requirements. Four university systems are exempt from the Act but are still subject to the higher education investment reporting requirements. Those four university systems fully complied with the higher education investment reporting requirements.
State agencies, universities, and community college districts that are subject to the Act reported total investments of $24 billion in fiscal year 2007. That total included $8,031 in derivatives as of August 31, 2007, compared with $170,627 in derivatives as of August 31, 2005 (the last reporting date).
In reviewing universities and community college districts for compliance with the higher education investment reporting requirements, auditors determined that the majority of these organizations had not fully complied by the initial due date of January 1, 2008. However, after auditors contacted them and established a new due date of January 23, 2008, to allow them to achieve compliance, these organizations posted most of the required information on their Web sites.
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