A Report on State of Texas Compliance with Federal Requirements for the Capitalization Grants for Drinking Water State Revolving Funds Program for the Fiscal Year Ended August 31, 2010
February 2011
Report Number 11-024
Overall Conclusion
The State of Texas complied in all material respects with the federal requirements for the Capitalization Grants for Drinking Water State Revolving Funds Program (Drinking Water Program) in fiscal year 2010.
As a condition of receiving federal funding, U.S. Office of Management and Budget (OMB) Circular A-133 requires non-federal entities that expend at least $500,000 in federal awards in a fiscal year to obtain annual audits. Those audits test compliance with federal requirements in 14 areas, such as allowable costs, cash management, and monitoring of non-state entities when the State passes federal funds through to those entities (subrecipients). In addition, each program may outline special tests specific to the program that auditors are required to perform. The Single Audit for the State of Texas included (1) all high-risk federal programs for which the State expended more than $85,612,909 in federal funds during fiscal year 2010 and (2) other selected federal programs.
From September 1, 2009, through August 31, 2010, the State of Texas expended $56.9 billion in federal funds for federal programs and clusters of programs. The State Auditor's Office audited compliance with requirements for the Drinking Water Program at the Water Development Board (Board), which spent $101,814,422 in federal Drinking Water Program funds during fiscal year 2010.
Auditors identified no material findings and two findings classified as significant deficiencies and non-compliance for the Drinking Water Program.