A Review of Fiscal Year 2002 Encumbrances and Payables at Selected Agencies
June 2003
Report Number 03-040
Overall Conclusion
We reviewed encumbrances and accounts payable at seven agencies to determine whether they accurately reported their obligations as of August 31, 2002, in accordance with Accounting Policy Statement (APS) 018: Encumbrance Report and Lapsing of Appropriations. Four of the agencies overstated encumbrances by a total of $25.5 million. While the agencies' encumbrance practices could allow them to keep cash balances that might otherwise be available for appropriation, we found no significant evidence that any of these seven agencies obligated funds with the intent to inappropriately circumvent the lapse of funds. We based this assessment on a limited review of the accounts payable and encumbrances that the agencies reported in the Uniform Statewide Accounting System (USAS) and their 2002 Annual Financial Reports (AFR). According to APS 018, the purpose of the binding encumbrance and payables report is to certify the correctness of USAS data, which is then used to identify funds that are available to lapse.
The 2002 State of Texas Comprehensive Annual Financial Report reported $6.0 billion in obligations (encumbrances and accounts payable) as of August 31, 2002. The seven agencies we reviewed reported $1.6 billion in obligations:
* Commission on Environmental Quality
* Parks and Wildlife Department
* Department of Public Safety
* Department of Economic Development
* Department of Protective and Regulatory Services
* Department of Human Services
* Department of Transportation
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