A Performance Audit
An Audit Report on Benefits Proportionality at Higher Education Institutions
May 2016
Summary Analysis
The University of Texas M. D. Anderson Cancer Center, the University of Texas at Austin, and Midwestern State University paid employee benefits in proportion to the sources of salary funding during fiscal year 2014. Those higher education institutions used General Revenue to pay for benefits only when they used General Revenue to pay for the associated salaries and wages. As a result, auditors concluded that they complied with the State’s proportionality requirements during fiscal year 2014.
In addition to auditing three higher education institutions, the State Auditor’s Office sent surveys to 58 higher education institutions asking them to report on the controls they had to help ensure that (1) the State’s interests were protected and (2) the higher education institutions paid for benefits in proportion to the sources of funds from which they paid salaries and wages. Forty1 of the higher education institutions surveyed reported they had controls to align and monitor source of funding limits or restrictions for salaries/wages and related benefits.
Auditors tested benefits proportionality for 35 employees at the Cancer Center for fiscal year 2014. Specifically, auditors tested the 382 salary/wage and benefit earning statements for those 35 employees. The 382 salary/wage and benefit earning statements totaled $4,712,610 in state salaries/wages and $804,797 in benefit payments from state General Revenue. For all 382 salary/wage and benefit earning statements, the Cancer Center paid benefits from the same sources of funding as the respective salaries. All employees tested also held personnel positions that were eligible to receive salaries/wages and related benefits from General Revenue.
In addition, auditors tested 10 payroll adjustment vouchers for fiscal year 2014 to determine whether the adjustments achieved benefits proportionality, were reasonable, and were accurate. Those 10 payroll vouchers totaled $8,563,803. All 10 payroll adjustment vouchers achieved benefits proportionality and were reasonable and accurate.
Auditors also applied data analysis techniques to certain accounting transactions that had the potential to affect the proportionality of General Revenue-funded benefits. Those transactions totaled $178,965,711. Auditors did not identify any transactions that adversely affected the proportionality of General Revenue-funded benefit payments.
Auditors tested benefits proportionality for 49 employees for fiscal year 2014. Specifically, auditors tested the 505 salary/wage and benefit earning statements for those 49 employees. The 505 salary/wage and benefit earning statements totaled $7,448,351 in state salaries and wages and $1,188,800 in benefit payments from state General Revenue. For all 505 salary/wage and benefit earning statements, UT-Austin paid benefits from the same sources of funding as the respective salaries. All employees tested also held personnel positions that were eligible to receive salaries/wages and related benefits from General Revenue.
In addition, auditors tested 10 payroll adjustment vouchers for fiscal year 2014 to determine whether the adjustments achieved benefits proportionality, were reasonable, and were accurate. Those 10 payroll vouchers totaled $8,563,803. All 10 payroll adjustment vouchers achieved benefits proportionality and were reasonable and accurate.
Auditors also applied data analysis techniques to certain accounting transactions that had the potential to affect the proportionality of General Revenue-funded benefits. Those transactions totaled $426,839,349. Auditors did not identify any transactions that adversely affected the proportionality of General Revenue-funded benefit payments.
Auditors tested benefits proportionality for 30 employees at Midwestern for fiscal year 2014. Specifically, auditors tested the 351 salary/wage and benefit earning statements for those 30 employees. The 351 salary/wage and benefit earning statements totaled $1,421,515 in state salaries/wages and $428,172 in benefit payments from state General Revenue. For all 351 salary/wage and benefit earning statements, Midwestern paid benefits from the same sources of funding as the respective salaries. All employees tested also held personnel positions that were eligible to receive salaries/wages and related benefits from General Revenue.
In addition, auditors tested all 11 payroll adjustment vouchers that were subject to benefits proportionality for fiscal year 2014 to determine whether the adjustments achieved benefits proportionality, were reasonable, and were accurate. Those 11 payroll vouchers totaled $96,629. All 11 payroll adjustment vouchers achieved benefits proportionality, were reasonable, and were accurate.
Auditors also applied data analysis techniques to certain accounting transactions that had the potential to affect the proportionality of General Revenue-funded benefits. Those transactions totaled $21,820,006. Auditors did not identify any transactions that adversely affected the proportionality of General Revenue-funded benefit payments.
The State Auditor’s Office sent a survey to each higher education institution that was subject to benefits proportionality requirements in Sections 6.08(a) and 6.08(b), page IX-27, the General Appropriations Act (83rd Legislature). The survey asked eight questions that enabled the higher education institutions to report on their controls for complying with those requirements. Forty of the higher education institutions surveyed reported that they had controls to align benefits with salaries/wages funding sources and monitor sources of funding limits for salaries, wages, and related benefits.6
All higher education institutions reported that they had a methodology to align benefits with salaries/wages funding sources.
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