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A Report on State of Texas Compliance with Federal Requirements for Selected Major Programs at the Department of Public Safety, the Texas A&M Forest Service, and the University of Texas Medical Branch at Galveston for the Fiscal Year Ended August 31, 2013

February 2014

Report Number 14-025

Overall Conclusion

With the exception of certain non-compliance disclosed in this report, the State of Texas complied in all material respects with federal requirements for the Fire Management Assistance Grant program and the Disaster Grants - Public Assistance (Presidentially Declared Disasters) program in fiscal year 2013.

In addition, the State of Texas complied in all material respects with federal requirements for the Homeland Security Grant Program in fiscal year 2013.

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 Single Audits. Those audits test compliance with federal requirements in up to 14 areas that may have a material effect on a federal program at those non-federal entities. Examples of the types of compliance areas include allowable costs, reporting, and monitoring of non-state entities (subrecipients) to which the State passes federal funds. The Single Audit for the State of Texas included (1) all high-risk federal programs for which the State expended more than $73,222,469 in federal funds during fiscal year 2013 and (2) other selected federal programs.

From September 1, 2012, through August 31, 2013, the State of Texas expended $48.6 billion in federal funds. The State Auditor's Office audited compliance with requirements for the Homeland Security Grant Program, the Fire Management Assistance Grant program, and the Disaster Grants - Public Assistance (Presidentially Declared Disasters) program at the Department of Public Safety (Department), the Texas A&M Forest Service (Forest Service) and the University of Texas Medical Branch at Galveston (Medical Branch).

During fiscal year 2013:

- The Department spent $150.1 million in Homeland Security Grant Program funds, $55.1 million in Disaster Grants - Public Assistance (Presidentially Declared Disasters) program funds, and $12.6 million in Fire Management Assistance Grant program funds.

- The Forest Service spent $43.2 million in Disaster Grants - Public Assistance (Presidentially Declared Disasters) program funds and $42.8 million in Fire Management Assistance Grant program funds.

- The Medical Branch spent $33.1 million in Disaster Grants - Public Assistance (Presidentially Declared Disasters) program funds.

Auditors identified 18 findings, including 2 material weaknesses with material non-compliance and 16 significant deficiencies with non-compliance. Of those 18 findings, 14 were identified at the Department (including the 2 material weaknesses with material non-compliance), 3 were identified at the Forest Service, and 1 was identified at the Medical Branch.

Fiscal year 2013 audit results for the Department represented an improvement compared with fiscal year 2012, when auditors identified 19 findings at the Department, 9 of which were classified as material weakness and/or material non-compliance.

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