An Audit Report on Financial Management Practices at the Texas Medical Board
February 2007
Report Number 07-012
Overall Conclusion
Since May 2006, when the Texas Medical Board (Board) presented information regarding an anticipated budget deficit for fiscal year 2006, the Board has made progress in improving its budget management processes. It has added a budget analyst position to its staff and plans to acquire an internal accounting system to improve its ability to record encumbrances and prepare budget-to-actual reports that will include all Board obligations.
While the Board has made progress, it should improve and document its methodologies for projecting the costs of activities reported in its Legislative Appropriations Requests and continue to improve processes for monitoring and controlling its expenditures.
The Board anticipates it will experience a budget deficit for fiscal year 2007. It has requested a supplemental appropriation of $1,823,075 to cover fiscal years 2006 and 2007 deficits, including paying back the $375,000 deficiency grant it previously received. See Table 1 on page 2 of this report for details. The Board originally reported that it could not open 58 cases for investigation without additional resources in fiscal year 2006; after receiving the deficiency grant, the Board reported that it opened those cases for investigation.
The Board has adequate controls to provide reasonable assurance that enforcement expenditures paid with Dedicated General Revenue are appropriate and reasonable. Its controls for managing capital budget expenditures are not adequate to provide reasonable assurance that these expenditures are accounted for correctly and are within budgeted amounts. The Board's maximum allowable capital budget for fiscal year 2006 was $206,438, but the Board made $239,630 in capital budget expenditures, thereby exceeding its budget by $33,192. All of the capital expenditures were for information technology. Of the total amount spent, approximately $181,000 was spent after May 2006. Given the Board's projected budget deficit, the Board should have considered delaying these expenditures until fiscal year 2007 and reconsidered its priorities for fiscal year 2007. The 2006 capital budget authority would carry forward to 2007.
The Board has made significant progress implementing most of the recommendations the State Auditor's Office made in An Audit Report on Expenditures at the Texas Medical Board (State Auditor's Office Report No. 06-033, April 2006). It has fully or substantially implemented five of the six recommendations from that report.
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