Central Education
1994 Statewide Financial and Compliance Audit
Report Number 95-102
Overall Conclusion
The Texas Education Agency is not adequately protecting its automated information. The Internal Audit Department did not base its audit plan on a current risk assessment and has never received a peer review.
The Agency is in compliance with most federal regulations related to the $1.5 billion of federal funds disbursed in fiscal year 1994.
The accounts in the Agency's 1994 Annual Financial Report that were tested as part of the statewide financial audit are materially accurate and properly reported. These accounts included Investments, $8.5 billion; Purchases of Investments, $1 billion; Sales of Investments, $613 million; Education Expenditures, $7.6 billion; Transfers In, $6.8 billion; and Revenues from Licenses, Permits and Fees, $336 million.
Key Findings
Policies and procedures over security for over access to the Agency's automated information resources are incomplete. In addition, adequate resources have not been dedicated to monitor controls that safeguard information resources.
The Agency's Internal Audit Department did not perform a current risk assessment to identify issues for its fiscal year 1994 and 1995 audit plans and has never received an internal audit peer review.
The Agency's time reports used for allocating administrative expenditures between state and federal programs were not accurate. Three of five divisions tested did not submit accurate June 1994 time reports due to mathematical errors and an incorrect time charge. In addition, supervisor review and approval, which is required by the operating procedures, was not performed by three of the five divisions. This issue has been identified in prior audits.
The Agency did not conduct timely reviews of all subrecipient audit reports. Seven of 45 audit reports tested were not reviewed timely. The reports were reviewed six months past the report receipt date.
By not using estimates, the Agency materially understated the amount of federal funds passed through to school districts on the Schedule of Federal Financial Assistance in the Annual Financial Report by $52.9 million. This misstatement occurred because the Agency did not record all federal expenditures by the school districts as of August 31, 1994.
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