Teacher Retirement System and Optional Retirement Program
An Opinion Audit on the Teacher Retirement System of Texas Year Ended August 31, 1994
Report Number 95-122
At August 31, 1994, the Teacher Retirement System (System) had assets of $33.9 billion to fund pension and other benefits for 593,065 members and 132,577 annuitants. Actuarial accrued liabilities for pensions were 97.9 percent funded. The unfunded remainder, $825 million, was projected to be amortized over a period of 2.2 years. The System paid out $1.6 billion in retirement benefits during the year.
Based on our audit, the System's component unit financial statements for fiscal year 1994 are accurately presented in all material respects, in accordance with generally accepted accounting principles. We noted no material internal control weaknesses or noncompliance with laws and regulations.
Reconciliations of the System's $33 billion investment portfolio, both internally and with custodian banks, were not always timely, well documented, or adequately reviewed.
Although generally effective, anticipated-income controls did not function or were not applied as intended in some cases. In fiscal year 1994, interest income covered by such controls totaled $1.377 billion, and dividend income $524 million
Access to computer resources is not adequately restricted to those employees needing access to perform their job duties. Without such controls, records could be changed without authorization, and such action not prevented or detected on a timely basis.
The System has no written policy designating the timing and scope of audits of insurance claim and retention charges by auditors independent of the insurance program and the insurance carrier.
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