Summary of Report 18-039

The Department received $270.1 million in revenues in fiscal year 2017 and $37.0 million in the first five months of fiscal year 2018 (September 1, 2017, through January 31, 2018). Of that amount, $143.9 million was for maintenance taxes that the Department assessed and the Comptroller’s Office collected during fiscal year 2017.

For 30 (97 percent) of the 31 individual revenue transactions for licenses, fees, and permits tested totaling $23.7 million, the Department:

• Had adequate supporting documentation.
• Processed the transactions with appropriate segregations of duties.
• Charged the correct fees.
• Used accurate calculations to determine the appropriate revenue amount to be collected.
• Accurately recorded the transactions in the Centralized Accounting and Payroll/Personnel System and the Uniform Statewide Accounting System.
• Appropriately processed daily summary level deposit amounts into its Cash Receipt System. Those amounts also had adequate supporting documentation.

However, the Department received and accepted a $1.6 million transaction from the Comptroller’s Office in error.

For the $143.9 million in maintenance tax revenues it received from the Comptroller’s Office in fiscal year 2017, the Department recorded and appropriately approved the revenues.

Jump to Chapter 1-A 

The Department recorded revenues related to financial examinations it conducted totaling $5.0 million for fiscal year 2017 through the first five months of fiscal year 2018. Insurers and other entities the Department regulates reimburse the Department for salaries and travel expenditures related to its financial examinations of those entities.

For the 29 financial examination revenue deposits tested, the Department prepared and processed the examination billing invoices in compliance with applicable statutes, rules, and Department policies and procedures. Those invoices captured the wages and travel-related expenses for 114 Department employees. Specifically, for all 29 deposits tested totaling $213,532:

• Appropriate personnel recorded and approved the timesheets used to prepare the examination billing invoices.
• The invoices matched the deposits.
• The invoices were supported by travel vouchers, when applicable.

In addition, for all three monthly payroll schedules tested, the Department correctly calculated salary-related expenses in compliance with applicable Department policies and procedures.

Jump to Chapter 1-B 

The Department had adequate controls over procurement and fuel card purchases, payments to unique vendors, and other non-travel expenditures. The Department recorded non-travel related expenditures totaling $37.6 million for fiscal year 2017 and $14.2 million for the first five months of fiscal year 2018.

For all 27 expenditures tested totaling $474,325, the Department:

• Made purchases as allowed by state purchasing policies.
• Procured items in the appropriate manner as required by the State of Texas Procurement Manual, or it received an exemption from procurement requirements.
• Reviewed and approved payment vouchers before it made payments.
• Made payments in a timely manner.
• Had adequate support for payments.

Jump to Chapter 2-A 

The Department had adequate controls over travel expenditures. The Department recorded travel expenditures totaling $2.2 million for fiscal year 2017 and $863,625 for the first five months of fiscal year 2018 (September 1, 2017, through January 31, 2018).

For all 32 travel expenditures tested totaling $36,179, the Department:

• Made travel reimbursements within the allowable limits set by Department policy and Texas Government Code.
• Reviewed and approved payment vouchers.
• Correctly calculated payment vouchers.
• Had adequate support for payments.

However, the Department did not consistently ensure that travel expenditures were approved as required by the Department’s policy. While 12 (38 percent) of 32 travel expenditures tested did not require prior approval because the travelers were appropriately documented as frequent travelers according to Department policy, 8 (40 percent) of the remaining 20 travel expenditures, totaling $5,558, did not include all required approvals. Specifically, employees did not submit travel request forms for approval prior to departure as required by the Department’s travel policy.

Jump to Chapter 2-B