Office of the City Auditor

Through its participation in the State's tobacco settlement distribution process, the City has received almost $13.3 million in tobacco settlement proceeds and interest earnings since calendar year 1999. The State of Texas has placed no restrictions on how the City must spend its portion of the tobacco settlement proceeds.

The City has not spent, nor does it have immediate plans to spend, the funds accumulated from tobacco settlement disbursements. According to City financial officials, the funds are being held in reserve within the City's Hospital Fund in case the federal government discontinues or substantially reduces funding for the Disproportionate Share Revenue (Dispro) program, which is one of the key funding sources for the City's Federally Qualified Health Clinics (FQHC).

This report was presented to City management for review and comment. We received minor comments and revisions that were agreed upon and incorporated; however, management submitted no formal response for publication with the report.

This report is presented as information to assist Mayor and Council in policy-making decisions; therefore, it contains no recommendations to management.

Click here to go to our audit request form to request a hard copy of this report (Report No. AU02301) or download the entire text of the City of Austin Tobacco Settlement Proceeds (Size: 528 KB) in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files.

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