Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Revenue

Financial Audit

For the Year Ended June 30, 1994

Objectives:

Evaluate Internal Control Structure: Tax assessments, collections, or refunds for individual and corporate income taxes, withholding taxes, insurance premium taxes, gasoline and special fuel taxes. Grant payments or credits for local government aids, homestead and agricultural credits, and renters property tax credits.

Test compliance with certain finance-related legal provisions.

Conclusions:

We found five areas where the internal control structure needed improvement:

• The department does not adequately review certain withholding tax information.
• Edits used to detect overclaimed corporate taxes are not properly secured.
• Processing controls over sales tax remittances need improvement.
• Sales tax system design weaknesses have not been resolved.
• The department's review of insurance premium tax returns is insufficient.

We found one departure from finance-related legal provisions:

• Penalties and interest on electronic funds transfer tax payments are not assessed.