Key points and summary

                        OFFICE OF STATE AUDITOR

              1993 Financial and Compliance Audit Results

                           Report # 94-105

The Texas Department of Human Services, for the second year, is in
material noncompliance with federal requirements.  Of the case
files tested 20% were not in compliance.

As reported in previous years the Texas Department of Human
Services has not materially complied with a subrecipent monitoring
requirements.  Audit reports were not obtained from 34% of the
Departments subrecipents, resulting in questioned costs of $28
million.

The Department did not ensure that contractors followed established
procedures for reimbursing child care expenses under the Child Care
Development block Grant Program.  As a result, incorrect
reimbursements were made.

Incorrect and incomplete data resulted in misallocation of indirect
costs to federal programs.

As noted in the prior year, the client information system and
payment system of the Texas Department of Protective and Regulatory
Services did not contain the same eligibility information for all
clients.

The Department did not limit request for federal funds to amounts
necessary to meet immediate cash needs.  The Department held excess
Social Service Block Grant fund for up to 21 days which is in
noncompliance with federal requirements.

For a copy of the entire report, contact:

OFFICE OF STATE AUDITOR
TWO COMMODORE PLAZA
206 EAST NINTH STREET, SUITE 1900
AUSTIN, TEXAS 78701
PHONE: 512-479-4700
FAX: 512-479-4884
E-MAIL: [email protected]