Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Administration
Internal Controls and Compliance Audit

 

Financial Audit Division Report 11-22

Released October 13, 2011

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Conclusion

The Department of Administration’s internal controls were generally adequate to ensure that it safeguarded its financial resources, accurately paid employees and vendors in accordance with management’s authorizations, and complied with finance-related legal provisions. However, the department had some weaknesses in its internal controls, including lack of segregation of duties in two areas, inadequate procedures for managing cooperative purchasing accounts receivable, and not maintaining appropriate access to select business systems.

For the items tested, the department generally complied with finance-related legal requirements. However, the department had some instances of noncompliance in managing accounts receivable.

The department resolved five out of seven prior findings and partially resolved one of the findings. The department improved controls in its cooperative purchasing program over administrative fees paid by vendors and partially resolved a finding on managing its accounts receivable. In addition, it promptly deposited cooperative purchasing receipts and improved the accuracy of liability dates recorded in the accounting system. We did not follow up on one of the seven findings that pertained to compliance related to professional-technical services contracts because it did not relate to financial activities we selected for audit.

Key Findings

• The department did not adequately segregate key financial responsibilities over certain payments and workers’ compensation checks.
• Prior Finding Partially Resolved: The department did not adequately manage its cooperative purchasing program accounts receivable.
• The department allowed some incompatible access to its workers’ compensation system and the state’s accounting system without maintaining sufficient mitigating controls.

Audit Objectives and Scope

Objectives	Period Audited
Internal Controls Finance-related legal compliance	July 1, 2008, through April 30, 2011
Programs Audited
Workers’ compensation Cooperative purchasing Building leases and contracts	Payroll expenditures System access