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Commission approves FY25 audit reports and FY26 internal audit plan; auditors recuse from Texas Lottery financial audit
Summary
External auditors presented FY25 internal audit reports for TDLR programs (disaster recovery, anti-trafficking follow-up, IT controls) and the proposed FY26 internal audit plan. The commission accepted the reports and the FY26 plan. Auditors also said they would not perform the Texas Lottery financial audit due to independence concerns; the State
TDLR's external auditors presented fiscal year 2025 internal audit findings across multiple programs and the proposed internal audit plan for FY26. Commissioners voted to accept the reports and approve the FY26 plan.
Dan Graves (auditor) told the commission that the agency's disaster recovery and business-continuity work received a "strong" rating, that anti-trafficking follow-up work had been remediated and also received a strong rating, and that an audit of IT services had findings that would be handled in follow-up procedures. Graves described a proposed FY26 internal audit plan that would include open-records and data-privacy audits and an interdivisional positional alignment audit, and follow-ups on IT general controls and business continuity items.
Commissioners discussed remediation timing for IT findings and were told by Britney Myers, TDLR chief financial officer, that remediation plans are in progress and that many items are expected to be completed by the end of the calendar year. The audit committee reported a peer-review acceptance and a required annual report that will be filed with the State Auditor's Office after commission approval.
Separately, auditors explained they had evaluated independence issues relating to the Texas Lottery financial-statement engagement and had recused themselves from that external financial audit. The auditors indicated the State Auditor's Office has begun the financial-audit work; state-auditor interviews and document requests were already underway.
The commission voted to accept the audit reports, to approve the FY26 internal audit plan, and to accept audit work for the veterinary board and other subunits as presented.
