A Performance Audit
An Audit Report on Financial Processes at the Pension Review Board
In fiscal year 2015, the Pension Review Board (Agency) had significant weaknesses in succession planning, cross-training, and policies and procedures that put its financial operations at risk. Specifically, when the Agency’s only accountant left employment in May 2015, the Agency had neither the staff nor the policies and procedures necessary to enable it to continue processing its payroll and non-payroll expenditures without assistance. However, it is important to note that the payroll expenditures that auditors tested at the Agency complied with state statutes and rules. In fiscal year 2015, payroll represented 91 percent of the Agency’s total expenditures.
The Agency Should Improve Succession Planning, Cross-training, and Policies and Procedures for Financial Processes
In fiscal year 2015, the Pension Review Board (Agency) had significant weaknesses in succession planning, cross-training, and policies and procedures that put its financial operations at risk.
To maintain its financial operations, in June 2015 the Agency requested that the former accountant provide training on financial processes to the executive director; the Agency later contracted with the former accountant for those services in July 2015. However, in contracting with that individual, the Agency (1) did not comply with statutory requirements regarding how soon an agency can contract with a former employee and (2) made $16,400 in advance payments on the contract that were unallowable according to the State of Texas Procurement Manual. As of March 2016, the Agency had paid that individual a total of $29,000 (which represented 21 percent of its $137,928 in non-payroll expenditures from September 2014 through March 2016).
Although the Agency had controls over its purchasing process, it did not consistently (1) ensure that travel expenditures complied with the Office of the Comptroller of Public Accounts’ travel allowance and reimbursement rates and (2) retain required documents to support non-payroll expenditures.