Audit Reports Affecting Multiple Agencies
Briefing Report on Reconciling State Financial Reports
Report Number 95-029
Standard Texas financial reports present different perspectives on the same financial realities. To use the full range of budget reports, internal financial reports, and the State's comprehensive annual financial report with discernment and confidence, it is necessary to understand each report in its own terms and the nature of the differences between them.
Four types of reconciling items explain most of the differences between reports. They are: differences in the organizational units or funds included (entity differences); differences in fund and transaction-type classification (perspective differences); differences in when financial transactions are measured (basis of accounting differences); and differences in reporting horizons (timing differences).
While reports for the State's fiscal year 1993 are logically related, they were not systematically linked in the processes by which they were prepared. Differences in report sources and preparation limit the efficiency, precision, detail, and comprehensiveness of reconciliations at this time. With the development and implementation of the Uniform Statewide Accounting System (USAS), improvement is now under way in financial accounting and reporting systems, which can facilitate the reconciliation process in the future.
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