Key points and summary

               A Report on the 1994 Financial and  
                    Compliance Audit Results  
  
                         Report # 95-124  
  
The information contained in the financial statements of Texas'  
1994 Comprehensive Annual Financial Report (CAFR) is presented  
fairly and can be relied upon to evaluate the State's financial  
condition.  
  
Material weaknesses were identified in certain elements of the  
internal control structure over the following federal programs:  

*    Block Grants for Prevention and Treatment of Substance Abuse 
     (Texas Commission on Alcohol and Drug Abuse)  
*    Food Distribution Program (Department of Human Services)  
*    Donation of Federal Personal Surplus Property Program (General
     Services Commission)  
*    Child Welfare Services program (CFDA 93.645), administered by
     the Texas Department of Protective and Regulatory Services. 
     Expenditures for these programs total $100 million and
     represent 45% of total federal funds expended by the
     Department in fiscal year 1994.  Payments have not been
     limited to appropriately documented clients and costs for the
     Child Welfare Services program.  This resulted in material
     noncompliance with federal requirements.
*    Job Opportunities and Basic Skills Training program (CFDA
     93.561) administered by the Texas Department of Human
     Services. 
Material weaknesses were identified in certain elements of the  
internal control structure affecting the general purpose  
financial statements at:  
  
*    Texas Commission on Alcohol and Drug Abuse  
*    Department on Aging  
  
Although these weaknesses are material to the internal control  
structure at the individual agencies, they are not material to  
the State of Texas as a whole.  
  
The Department of Protective and Regulatory Services, General  
Services Commission, and Department of Human Services had  
instances of noncompliance with federal requirements.  
  
The State's financial reporting process can be improved by using  
the Uniform Statewide Accounting System (USAS) to generate the  
CAFR.  Currently, the State compiles its financial position once  
a year by an extensive, mostly manual, consolidation of the  
relevant financial data.

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]