ACCOUNTING: AUDITS

The comptroller of public accounts and the Coordinating Board jointly shall prescribe and periodically update a uniform system of financial accounting and reporting for institutions of higher education, including definitions of the elements of cost on the basis of which appropriations shall be made and financial records shall be maintained. The accounts of the institutions shall be maintained and audited in accordance with the approved reporting system. Education Code 61.065(a)

Annual Audit Report

A community college’s Annual Financial Report (AFR) [see CDA] must be audited before submission, in accordance with the Budget Requirements and Annual Financial Reporting Requirements for Texas Public Community Colleges manual. The auditor must certify the audit, but the audit does not need to be approved by the governing board before submission. Budget Requirements and Annual Financial Reporting Requirements for Texas Public Community Colleges, Fiscal Year 2025 (PDF)1

Information from State Auditor

At a reasonable time in advance of an independent audit of a junior college district, the state auditor shall provide the presiding officer of the district's governing body and the chief executive officer of the district with written information relating to the procedures for and scope of the audit. The state auditor shall include in the materials information describing:

1. How the appropriate representatives of the district may participate in the audit planning process; and

2. How the district may request information or assistance in preparing for the audit from the state auditor.

Gov’t Code 321.0137(a)

Compliance Monitoring and

Audits by the Coordinating Board

The chief audit executive may conduct compliance monitoring or audits of public junior colleges' compliance with Education Code Chapter 130A, the General Appropriations Act, and other related formula funding statutes. [See CAAA]

In conducting an audit or compliance monitoring, the Coordinating Board may request the assistance of the internal audit office at an institution of higher education, as institutional resources allow, to examine the institution's use of funds allocated by, and data reported to, the Coordinating Board.

To avoid duplication of effort and assist the Coordinating Board in identifying risk, an internal auditor at an institution shall notify the Coordinating Board of any audits conducted by the institution's internal or external auditor involving funds allocated or administered by the Coordinating Board or data reported to the Coordinating Board.

19 TAC 13.526(b)-(d)

Audit

An “audit” is an engagement to audit the program conducted by the Coordinating Board's internal auditor and internal audit or compliance monitoring staff pursuant to either Education Code 130A.006(4) or 61.035. This term may include a site visit, desk review, or examination of the institution's use of funds allocated by the Coordinating Board and data reported to the Coordinating Board. The term includes auditing undertaken to obtain evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policy-making decisions, including data used for formula funding allocations, to ensure the data is reported accurately. 19 TAC 13.522(1)

Compliance Monitoring

"Compliance monitoring” means a risk-based audit and compliance function conducted by the Coordinating Board pursuant to either Education Code 130A.006(4) or 61.035, for the purpose of reviewing and assessing programmatic, legal, and fiscal compliance. This function may include conducting audits, site visits, desk reviews, or other examinations, to ensure that funds allocated or distributed by the Coordinating Board are allocated, distributed, and used in accordance with applicable law and Coordinating Board rule. The function includes obtaining evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policymaking decisions, including data used for formula funding allocations, to ensure the data is reported accurately. 19 TAC 13.522(4)

Publication

At the time and in the manner provided by the state auditor, a state agency, including a college district, shall post on the agency's internet website:

1. The agency's internal audit plan approved as provided by Government Code 2102.008; and

2. The agency's annual report required under Government Code 2102.009.

A state agency is not required to post information contained in the agency's internal audit plan or annual report if the information is excepted from public disclosure under the Texas Public Information Act, Government Code Chapter 552.

A state agency shall update the posting required under Government Code 2102.015 at the time and in the manner provided by the state auditor to include a detailed summary of the weaknesses, deficiencies, wrongdoings, or other concerns, if any, raised by the audit plan or annual report.

A state agency shall update the posting required under Section 2102.015 to include a summary of the action taken by the agency to address the concerns, if any, that are raised by the audit plan or annual report.

Gov’t Code 2102.015

Each taxing unit shall maintain an internet website or have access to a generally accessible internet website that may be used for the purposes of this provision. Each taxing unit shall post or cause to be posted on the internet website in a format prescribed by the comptroller the information described by Tax Code 26.18, including the most recent financial audit of the taxing unit. [See CAI] Tax Code 26.18

1 Budget Requirements and Annual Financial Reporting Requirements for Texas Public Community Colleges, Fiscal Year 2025 (PDF): https://reportcenter.highered.texas.gov/agency-publication/guidelines-manuals/annual-financial-reporting-manual-for-texas-public-community-colleges-2025/