A Report on State Agency, University, and Community College District Compliance with the Public Funds Investment Act and Investment Reporting Requirements
June 2012
Report Number 12-035
Overall Conclusion
Most state agencies, universities, and community college districts fully complied with the Public Funds Investment Act (Act) in fiscal year 2011. Additionally, all universities and community college districts fully complied with higher education investment reporting requirements mandated by Rider 5, page III-232, the General Appropriations Act (82nd Legislature) and A Review of Higher Education Investment Reporting Requirements (State Auditor's Office Report No. 02-058, July 2002).
With approximately $54.5 billion in investments as of August 31, 2011, it is important that state agencies, universities, and community college districts comply with statutes and investment reporting requirements designed to help the Legislature, the entities' boards, and the public ensure that state entities manage and disclose their investments appropriately. The following describes compliance by type of state entity for fiscal year 2011:
- Agencies. Ten of the 15 agencies subject to the Act were in full compliance with the Act. The Adjutant General's Department was noncompliant with the Act because it did not submit a compliance audit report. The Central Texas Turnpike System at the Department of Transportation, three programs of the Trusteed Programs within the Office of the Governor that are subject to the Act, the Juvenile Justice Department, and the Texas Access to Justice Foundation were substantially compliant with the Act.
- Universities. Ten of the 17 universities subject to the Act were in full compliance with the Act. The Texas State University System Administration was noncompliant with the Act because it did not submit a compliance audit report. Sul Ross State University and Texas Southern University were minimally compliant with the Act. Midwestern State University, Texas Woman's University, the University of North Texas at Dallas, and the University of North Texas System Administration were substantially compliant with the Act. In addition, all 17 universities were in full compliance with the higher education investment reporting requirements.
- Community college districts. Of the 50 community college districts subject to the Act, 46 were in full compliance with the Act. Texarkana College was noncompliant with the Act because it did not comply with many requirements for its policies, contracting, training, reporting, reviewing, or auditing. The Austin Community College District, Frank Phillips College, and Laredo Community College were substantially compliant with the Act.
In addition, all 50 community college districts were in full compliance with the higher education investment reporting requirements.
- Universities not subject to the Act but still subject to the higher education investment reporting requirements. Four university systems have asserted that they are not subject to the Act but are still subject to the higher education investment reporting requirements. Those four university systems fully complied with the higher education investment reporting requirements.
In reviewing agencies, universities, and community college districts for compliance with the Act, auditors determined that some entities had not fully complied by the initial due date of January 1, 2012. In addition, auditors determined that a significant number of universities and community college districts had not fully complied with the higher education investment reporting requirements by the relevant due dates, the latest of which was February 29, 2012. However, after auditors contacted them and established a new due date of April 18, 2012, to allow them to achieve compliance, most of those entities either submitted the required information to the State Auditor's Office or posted it on their Web sites.
The State Auditor maintains a Web site that discusses some of the investment requirements and includes tools to assist entities and auditors in performing their compliance audits. The address for this Web site is http://www.sao.texas.gov/InternalAudit/PublicFunds/.