An Audit Report on the Emerging Technology Fund
April 2011
Report Number 11-029
Overall Conclusion
The Emerging Technology Fund (ETF) should make significant improvements to promote greater transparency and accountability.
Issues in a number of areas impair the ability to administer the ETF in the best interests of the State. It is important to hold recipients of funds accountable. Auditors identified the following weaknesses:
- Decision making related to the ETF and recipients of funds is not open to the public.
- The ETF conducts limited monitoring of recipients' performance and expenditures of funds.
- The Office of the Governor does not report the value of the State's investments through the ETF on its financial statements.
- The ETF does not administer its contracts with the seven Regional Centers for Innovation and Commercialization (RCICs) and the Texas Life Science Center for Innovation and Commercialization (Texas Life Science Center) in a consistent manner. Both the RCICs and the Texas Life Science Center evaluate and make recommendations to the ETF's Advisory Committee regarding applications for funds. The Advisory Committee then makes its recommendations to the ETF's trustees. Trustees make the final approvals on ETF grants and awards.
The Office of the Governor, which administers the ETF, was cooperative and provided all of the information the State Auditor's Office requested during this audit.
The Office of the Governor did not agree with certain conclusions and recommendations in this report, and its detailed management's response is presented in Chapter 6 beginning on page 40. The State Auditor's Office reviewed the information in management's response but did not modify the conclusions or recommendations in this report as a result of that review.