Audit Reports Affecting Multiple Agencies
A Briefing Report on The State's Compliance With Federal Securities Laws on Municipal Securities Disclosure
December 1997
Report Number 98-009
Overall Conclusion
The State of Texas appears to have made significant efforts to comply with Securities and Exchange Commission (SEC) Disclosure Rule 15c2-12. The State has established a process to comply with the new continuing disclosure requirements imposed by the amendments to SEC Rule 15c2-12.
Our survey of the 20 state agencies and universities authorized to issue bonds on behalf of the State indicated substantial compliance with these federal disclosure rules. However, the survey also indicated that improvements can be made in policies and procedures, reliance on hired professionals, and use of industry disclosure guidelines.
Key Facts and Findings
The State of Texas has established a process to comply with federal disclosure requirements for municipal bonds. The Bond Review Board and the Office of the Comptroller of Public Accounts have contractually agreed to disclose annual financial information and operating data on an ongoing basis.
Our survey of state agency and university bond issuers indicated that:
- Although state issuers reported compliance, most issuers reported that they have no written policies and procedures for compliance with disclosure rules.
- Issuers reported heavy reliance on hired professionals to comply with federal disclosure rules.
- Issuers generally do not use industry guidelines or publications to enhance their compliance with disclosure rules.
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