A Financial Audit
A Report on State of Texas Compliance with Federal Requirements for the Research and Development Cluster for the Fiscal Year Ended August 31, 2018
February 2019
Summary Analysis
The State of Texas complied in all material respects with the federal requirements for the Research and Development Cluster in fiscal year 2018.
As a condition of receiving federal funding, Title 2, Code of Federal Regulations, Section 200, requires non-federal entities that expend $750,000 or more in federal awards in a fiscal year to obtain annual Single Audits. Those audits test compliance with federal requirements in up to 12 areas that may have a material effect on a federal program at those non-federal entities.
The Single Audit for the State of Texas included (1) all high-risk federal programs for which the State expended more than $84,024,032 in federal funds during fiscal year 2018 and (2) other selected federal programs.
From September 1, 2017, through August 31, 2018, the State of Texas expended $56.0 billion in federal funds. The State Auditor’s Office audited compliance with requirements for the Research and Development Cluster at eight higher education institutions. Those eight higher education institutions spent $1.3 billion in federal Research and Development Cluster funds during fiscal year 2018.
Auditors identified 27 findings for the Research and Development Cluster, including: twenty-three findings classified as significant deficiencies and non-compliance, and four findings classified as a significant deficiency.
Jump to report on control and compliance
We have audited the State of Texas’s (State) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the Research and Development Cluster for the year ended August 31, 2018.
In planning and performing our audit of compliance, we considered the State’s internal control over compliance with the types of requirements that could have a direct and material effect on the Research and Development Cluster to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the Research and Development Cluster and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
This section identifies significant deficiencies, material weaknesses, and instances of non-compliance, including questioned costs, as required to be reported by Title 2, Code of Federal Regulations, Section 200.516(a).
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