Audit Reports Affecting Multiple Agencies
A Review of Controls over Investment Practices at Five State Investing Entities
February 1997
Report Number 97-036
Overall Conclusion
Controls over investment practices at the five entities reviewed appear adequate to ensure accountability for the entities' investments, although some enhancements to existing controls were identified. Only minor instances of noncompliance were identified at the two entities subject to the Public Funds Investment Act (Chapter 2256, Government Code). Investments at the entities we reviewed, totaling over $3.4 billion, are used to fund higher education and state-sponsored loan programs as well as to pay operational costs.
Key Facts and Findings
The boards of Texas Tech University and the Texas A&M University System could benefit from direct access to outside investment professionals to assist in overseeing investment operations.
Oversight at the Veterans Land Board could be enhanced through increased formal monitoring of investment operations.
Controls are in place at Texas Tech University to manage the risk associated with a high concentration of collateralized mortgage obligations in the University's Cash Investment Pool.
This review represents Phase II of the investment practices review that began in fiscal year 1995. A total of 11 entities have been reviewed to date, representing approximately 93 percent of the State's total investment balances.
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