A Report on the Audits of the Fiscal Year 2012 Financial Statements of the Department of Transportation, the Central Texas Turnpike System, and the Texas Mobility Fund
January 2013
Report Number 13-016
Overall Conclusion
In our audit reports dated December 12, 2012, we concluded that the following financial statements were materially correct and presented in accordance with accounting principles generally accepted in the United States of America:
- The Department of Transportation's (Department) basic financial statements for fiscal year 2012.
- The Department's Central Texas Turnpike System's basic financial statements for fiscal year 2012.
- The Department's Texas Mobility Fund's basic financial statements for fiscal year 2012.
The Department published our audit reports in each set of basic financial statements, which it intends to post on its Web site at:
- The Department's basic financial statements and Central Texas Turnpike System's basic financial statements:
http://www.txdot.gov/inside-txdot/forms-publications/publications/finance/reports.html.
- The Department's Texas Mobility Fund's basic financial statements:
http://www.txdot.gov/inside-txdot/forms-publications/publications/finance/mobility-fund.html.
The audit of the Department's basic financial statements for fiscal year 2012 was performed to comply with Texas Transportation Code, Section 201.2041, which required the Department to submit an audited financial report to the Sunset Advisory Commission prior to September 1, 2013. This was the first financial opinion audit that the Department had received on its basic financial statements since an opinion was issued on the Department's basic financial statements for fiscal year 1986.
We also issued a report on internal control over financial reporting and on compliance and other matters as required by auditing standards (that report, including responses from management, is presented in this report). In that report, auditors identified a significant deficiency in the Department's control environment over financial reporting. Specifically, although the Department has made some improvements, there are still weaknesses in its process for capturing and analyzing innovative financing agreements. In addition, there is ineffective communication among Department offices, divisions, and districts. Those weaknesses led to the Department making several restatements to beginning balances in its 2012 financial statements. Auditors also identified a significant deficiency in the management of access to certain information systems that the Department uses in financial reporting.
Our procedures were not intended to provide an opinion on internal control over financial reporting or to provide an opinion on compliance with laws and regulations. Accordingly, we do not express an opinion on the effectiveness of the Department's internal control over financial reporting or on compliance with laws and regulations.
Auditors communicated certain issues that were not material or significant to the audit objectives in writing to the Department's management.
As required by auditing standards, we will also communicate to the Texas Transportation Commission certain matters related to the conduct of a financial statement audit.
The report also presents historical financial data regarding trends in the Department's financial activity in debt administration, revenue, expenditures, toll revenue, toll expenditures, and cash sources and letting of construction contracts. Additional information is available in a 2012 State Auditor's Office report on the Department's performance measures (An Audit Report on Performance Measures, Implementation of Prior Audit Recommendations, and Trends at the Department of Transportation, State Auditor's Office Report No. 12-049, August 2012).