Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Management and Budget
Banking and Vendor Controls
Internal Control and Compliance Audit

 

Financial Audit Division Report 10-24

Released July 1, 2010

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Conclusion

The Department of Management and Budget’s internal controls over banking disbursements and vendor arrangements were generally adequate to ensure that the department prevented unauthorized payments from the state’s bank accounts, safeguarded state warrants, accurately paid the state’s vendors, protected not public vendor data (including bank account information), and acted in accordance with management’s authorization.

For the items tested, the Department of Management and Budget generally complied with the significant legal-related requirements.

However, the department did not adequately manage the vendor files within the state’s accounting system and had other control weaknesses. The following Findings and Recommendations provide further explanation about these control weaknesses.

Findings

• The department did not adequately assess its business risks or monitor the effectiveness of its internal controls over the state’s disbursements and vendor files in the state’s accounting system.
• The department did not adequately manage the vendor files within the state’s accounting system.
• The department did not sufficiently restrict access to some data files containing not public vendor information.
• The department allowed incompatible access to the state’s accounting system and unnecessary access to the bank’s web-based application.
• The department did not adequately control some payments made outside the state’s regular payment process.

Audit Objectives and Scope

Objectives		Period Audited
Internal Control and Legal Compliance		Fiscal Year 2010

Areas Audited
We audited the department’s controls, including the state treasury’s controls, over the electronic payments made through the state’s accounting and payroll systems, the warrants issued from these two systems, and the vendor files maintained in the accounting system.