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A A Legislative Summary Document Regarding
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Texas Education Agency
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Lawrence F. Alwin, CPA
State Auditor
Contents State Auditor's Observations
Financial Profile
Key Findings from Previous Audits
and Reviews The Texas Education Agency (Agency) receives more than $2 billion in federal funds
Performance Management each year. The tracking of this funding is complicated because of the differences between
Quality Assurance Team Reviews state appropriation year, state fiscal year, federal award year, and school year.
Disaster Preparedness The General Appropriations Act gives appropriation authority to the Agency beginning in
Information System Vulnerability September each year, but there is no actual federal cash to draw against until the following
Assessments July. Because the federal funds are received so late in the year, the balances on hand at
Travel Expenditures year-end appear to be high. However, because this money is intended for the school year
that is just beginning, the balances are reasonable.
The Agency held more than $2 million in a suspense account for more than five years. The Agency could not identify
the original source of the funds or the accounting periods to which the associated expenditures and receipts related.
Suspense accounts are generally supposed to be cleared in a timely manner. Suspense accounts are typically used to
record monies for which the proper accounting has not been determined. In November 2002, the Agency determined
that this money should be returned to unappropriated General Revenue and made the necessary transfer.
Increased agency-level planning, coordination, and information management for its monitoring function could enable the
Agency to resolve long-standing monitoring problems.
OurAudit Report on 19 Agencies' Compliance With Historically Underutilized Business Requirements found that the
Agency did not make a "good-faith effort" to comply with historically underutilized business (HUB) requirements.
We continue to observe negative effects because of the State Board of Education's (Board) inability to use the Permanent
School Fund's (Fund) total return (interest, dividends, and net capital gains) to make distributions to the Available
School Fund. The Texas Constitution requires the Fund to distribute only interest and dividends (current income). This
distribution method puts the Board's need to earn enough interest and dividends to generate adequate current
distributions at odds with its long-term need to earn high total return to help ensure that the Fund grows at least as fast as
inflation.
Prepared for the 78th Legislature
by the State Auditor's Office
January 2003 SAO No. 03-327
This is not an audit report and, with the exception of any audit report summaries, the material in this document has
not been subjected to all of the tests and confirmations performed in an audit.
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Texas. Office of the State Auditor. A Legislative Summary Document Regarding Texas Education Agency, report, February 2003; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth517542/m1/1/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.