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A Summary of Financial and Performance Reports Submitted by Regional Planning Commissions

October 2013

Report Number 14-005

Overall Conclusion

All 24 regional planning commissions (RPCs) in Texas submitted all statutorily required financial, asset disposal, productivity, performance, and salary reports to the State Auditor's Office. Submitting those reports is important because, according to their most recent annual financial statements, the 24 RPCs:

- Received $863,200,503 in revenues.

- Spent $41,988,565 in American Recovery and Reinvestment Act funds.

The financial statements the RPCs submitted contained the statutory elements required by Chapter 391 of the Texas Local Government Code. However, 6 (25 percent) of the 24 RPCs either (1) submitted salary schedules to the State Auditor's Office after the due date or (2) submitted salary schedules that exceeded the state classification schedule salaries for some positions.

The information in this report covers RPC reports the State Auditor’s Office obtained between June 2012 and August 2013. Because RPCs do not have the same fiscal years, there were 5 different fiscal year end dates among the 24 RPCs.

Financial Statements

External certified public accountants (CPAs) issued unqualified opinions on the financial statements for all 24 RPCs, and all of the financial reports contained the statutory elements required by Chapter 391 of the Texas Local Government Code. However, for 5 (21 percent) of the 24 RPCs' audited financial statements, the CPAs identified material weaknesses and/or significant deficiencies in internal controls over financial reporting or compliance with major federal and state award programs. Those five RPCs were:

- The Ark-Tex Council of Governments (see Chapter 1-B).

- The Concho Valley Council of Governments (see Chapter 1-G).

- The Middle Rio Grande Development Council (see Chapter 1-N).

- The Permian Basin Regional Planning Commission (see Chapter 1-R).

- The Texoma Council of Governments (see Chapter 1-W).

According to their audited financial statements, management of those five RPCs asserted that they had taken or were taking steps to address the material weaknesses and/or significant deficiencies. It is important to note that the findings of significant deficiencies for the Texoma Council of Governments were the same findings of significant deficiencies identified in that RPC's financial statement audits from the previous two years. Additionally, a material weakness finding for the Texoma Council of Governments was the same finding of material weakness identified in the previous two years' audits of that RPC's financial statements.

Changes to RPCs' Reporting Requirements

Following the 82nd legislative session, the Office of the Governor repealed sections of the Texas Administrative Code that contained requirements and guidance related to the reports that RPCs were required to submit under the Texas Local Government Code. Those sections contained criteria related to reporting requirements such as report due dates, program output and outcome measures, and the details that RPCs should report regarding disposed assets. While the Texas Local Government Code still requires RPCs to submit those reports, it specifies a due date only for the RPCs’ submission of salary schedules.

RPCs' Programs

The information the RPCs submitted to the State Auditor's Office indicated that the RPCs have multiple programs and functions. According to the RPCs' audited financial statements, some of the programs on which the RPCs spent the largest amounts of funds included workforce programs, transportation programs, and community development.

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