A Performance Audit
An Audit Report on Financial Processes at the Texas Board of Nursing
The Texas Board of Nursing (Board) generally had processes and related controls in fiscal year 2015 to ensure that it administered financial transactions in accordance with applicable statutes, rules, and Board policies and procedures. However, it should improve certain controls over purchases and contracting, financial reporting and asset management, payroll and travel, and revenue. It also should document and consistently follow its policies and procedures for financial processes.
The Board generally had adequate controls over its purchasing process; however, it did not consistently (1) follow its policies and procedures related to required approvals, (2) retain required documentation to support purchases, and (3) code purchases correctly in its accounting system. Auditors also identified instances in which the Board exceeded established total contract amounts.
The Board Generally Had Controls to Ensure That Financial Information Was Accurate and Complete; However, It Should Improve Controls Over Accounting for Assets
The Board had informal procedures for its financial reporting that followed the Office of the Comptroller of Public Accounts’ reporting requirements; however, the Board did not document those procedures. It also did not document the review and approval of its annual financial report to ensure that report met all requirements and was accurate and complete. As a result, auditors identified inaccuracies in the capital assets and depreciation in the Board’s fiscal year 2015 annual financial report. Those inaccuracies occurred because the Board did not report asset purchases in the State Property Accounting (SPA) system for more than six years (reporting that information is necessary for the Board to accurately capture capital assets and depreciation in its annual financial report).
In addition, the Board recorded a $250,000 advance payment for future construction to its facility as an expense under repairs and maintenance in its fiscal year 2015 annual financial report. However, because the Board did not have a work plan and budget that described the work to be performed, it did not have the information necessary to determine whether it should have (1) expensed that payment or (2) processed that payment as a capital expenditure. After it determines the nature of the work to be performed, the Board should determine how to record that payment in its accounting records and work with the Office of the Comptroller of Public Accounts to determine whether it should report the improvements in SPA.
The Board Generally Had Processes and Related Controls for Payroll and Travel Expenditures, But It Should Consistently Comply with Its Policies and Procedures
The Board generally had controls to ensure that it processed payroll and travel expenditures in accordance with state statutes and rules. The payroll and travel expenditures tested were generally appropriate, and the Board processed them in accordance with state requirements. However, the Board did not consistently comply with its internal policies and procedures for documenting those expenditures.
The Board Generally Had Controls to Deposit Revenue; However, It Should Segregate Certain Duties and Consistently Deposit Funds within the Statutorily Required Time Frame
The Board had controls to deposit revenue into the State Treasury. However, it should segregate certain duties related to revenue and consistently deposit revenue into the State Treasury within the statutorily required time frame.
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