Department of Finance
Fiscal Year Ended June 30, 1999
Key Findings and Recommendations:
- The statutory method used to allocate the assets of the Post Retirement Fund may distort the financial reporting of the individual retirement funds in the state's financial statements. Use of the cost basis may vary from the fair value based allocation required by generally accepted accounting principles. We recommended that the Department of Finance work with the State Board of Investment and the retirement systems to develop a method of calculating participation in the Post Retirement Fund for financial reporting purposes that uses fair value accounting as the basis for the allocation. (Finding 1, page 2)
- The department does not provide state agencies with useful or timely information about employees' access to the state's accounting system. The system security report, issued annually, does not allow agencies to easily determine the appropriateness of employees' security clearances. We recommended that the department provide agencies with usable security information, structured to meet their decision-making needs. (Finding 2, page 3)
- The department does not understand some parts of the security infrastructure for the state's accounting system. We recommended that the department critically review and document all aspects of the system's security infrastructure. (Finding 3, page 5)
- In its response, the Department of Finance agreed with the report's findings and is taking corrective action to resolve the issues.
The Department of Finance prepares the state's general purpose financial statements and is responsible for the financial operations of the state. The department manages the state's main accounting systems, coordinates the sale of state general obligation bonds, enters into master lease purchase agreements for state agencies, processes payments of some appropriations and grants, and provides guidance to other state agencies in areas of financial management. We expanded our fiscal year 1999 audit scope to include a review of some of the Department of Finance's administrative expenditures, including payroll, computer system services, and professional/technical services.