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An Audit Report on Financial Processes at the Texas Ethics Commission

July 2023

Overview

The Texas Ethics Commission (Commission) did not administer all of its financial transactions in accordance with applicable requirements. Specifically, the Commission (1) purchased services for its Electronic Filing Software (EFS) system that it did not need at the time they were purchased, (2) made advance payments to its EFS vendor that were not allowed, and (3) inaccurately reported those purchases in its Annual Financial Report for fiscal year 2022. The Commission also did not report all of its EFS contracts to the Legislative Budget Board as required.

In addition, the Commission should improve its payroll function by ensuring adequate segregation of duties and by maintaining required documentation to support personnel actions. It should improve its revenue function by performing reconciliations and processing refunds of certain transactions in compliance with applicable requirements.

HIGH

ELECTRONIC FILING SOFTWARE SYSTEM

The Commission made purchases for its EFS system that did not comply with applicable requirements. The total value of the EFS contracts for maintenance and modification services between fiscal years 2016 and 2023, including additional purchases, was $4.1 million.

Jump to Chapter 1-A
LOW

EXPENDITURES PROCESSING

The Commission accurately processed expenditures related to (1) professional fees and services and (2) repairs and maintenance, which totaled $1.3 million, or 33 percent of the Commission’s expenditures from September 1, 2021, to December 31, 2022.

Jump to Chapter 1-B

MEDIUM

PAYROLL

The Commission accurately processed payroll transactions, which totaled $2.5 million, or 62 percent of the Commission’s expenditures between September 1, 2021, and December 31, 2022. However, it did not always have appropriate segregation of duties and did not always maintain required documentation to support personnel actions.

Jump to Chapter 2
MEDIUM

REVENUE COLLECTION AND PROCESSING

The Commission collected and recorded revenues accurately. However, it did not perform reconciliations or issue refunds of credit card processing fees in accordance with applicable requirements. Revenues collected between September 1, 2021, and December 31, 2022 totaled $1.4 million.

Jump to Chapter 3
MEDIUM

POLICIES AND PROCEDURES

The Commission did not have approved written policies and procedures for all of its financial processes related to revenue collection, payroll, expenditure processing, or information security.

Jump to Chapter 4

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1501 North Congress Ave.
Austin, TX 78701
Phone: (512) 936-9500
Fax: (512) 936-9400
Email: auditor@sao.texas.gov
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