A Report on State of Texas Compliance with Federal Requirements for the Highway Planning and Construction Cluster of Federal Programs and the Airport Improvement Program for the Fiscal Year Ended August 31, 2010
February 2011
Report Number 11-025
Overall Conclusion
With the exception of certain non-compliance detailed in this report, the State of Texas complied in all material respects with the federal requirements for the Highway Planning and Construction cluster of federal programs in fiscal year 2010.
The State of Texas also complied in all material respects with the federal requirements for the Airport Improvement 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 such as allowable costs, procurement, reporting, and monitoring of non-state entities when the State passes federal funds through to those entities (subrecipients). Additionally, 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 Highway Planning and Construction cluster of federal programs and the Airport Improvement Program at the Department of Transportation (Department), which spent $2,435,940,254 in federal Highway Planning and Construction cluster funds and $79,363,405 in federal Airport Improvement Program funds during fiscal year 2010.
Auditors identified eight findings, including two material weaknesses with material non-compliance. Both of the material findings were related to the Highway Planning and Construction cluster of federal programs.