Business and Economic Development
A Review of Projections for the Smart Jobs Fund, the Unemployment Compensation
Trust Fund, and
the Smart Jobs Holding Fund
September 2001
Report Number 02-001
Overall Conclusion
The State Auditor's Office estimates that the ending balance in the Smart Jobs
Fund at the Texas Department of Economic Development (Department) will be $101.6
million when the Smart Jobs program is concluded. Of this amount, $83.4 million
is not obligated and is currently available. We estimate an additional $18.2
million will become available as existing contracts are closed.
The Texas Workforce Commission's (Commission) two-month projections of fund
balances for the Unemployment Compensation Trust Fund have generally been within
five percent of the actual fund balance for each month.
Key Facts and Findings
- Our $101.6 million estimate of the remaining balance in the Smart Jobs Fund
is significantly higher than the Department's estimated fund balance of $71.6
million primarily because:
- The Department's estimate is based on actual encumbrances of $28.7 million
for existing contracts. However, based on historical payout trends, we estimate
that $18.2 million will become available as these contracts are closed.
- The Department reserves $7.6 million for grants that it has not yet awarded.
However, the Department has not been authorized to award any new contracts
and the Smart Jobs program expires on December 31, 2001.
- The Department's estimate reserves $4 million to award contracts based
on House Bill 1333(77th Legislature) related to the creation of qualified
defense related jobs. However, the Department has not executed any contracts
for these funds.
- In reviewing the costs necessary to conclude the Smart Jobs program, we
determined that the Department's estimate of $923,000 for fiscal year 2002
administrative expenditures for terminating the Smart Jobs program is reasonable.
However, the information provided by the Department did not justify the need
for its estimated fiscal year 2003 Smart Jobs program administrative expenditures
of $177,000. This amount is included in our estimate of the remaining balance
in the Smart Job Fund.
- The Commission's projection process uses specific factors and reliable historical
data to estimate balances in the Unemployment Compensation Trust Fund and
the Smart Jobs Holding Fund.
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