Office of the Legislative Auditor - Financial Audit Division

Report Summary

Financial-Related Audit

Department of Labor and Industry

Three Fiscal Years and Six Months Ended December 31, 1999

The Department of Labor and Industry's internal controls provided reasonable assurance that assets were safeguarded, revenues and expenditures were accurately recorded in the state's accounting and payroll systems, and financial transactions were in compliance with applicable finance-related legal requirements and management's authorization. However, we noted the following internal control weaknesses during our review.

Key Findings and Recommendations:

• The department produced but did not review a key SEMA4 payroll system report. We recommended that the SEMA4 Payroll Register be reviewed by an employee independent of the input function to ensure the integrity of timesheet hours, payrates, and special transactions being processed.
• The department did not establish reasonable timeframes on its safety grants and did not provide for timely management authorization. We recommended that the department review and modify its safety grant timeframes.

Financial-Related Audit Reports address internal control weaknesses and noncompliance issues noted during our audits of state departments and agencies. The scope of our audit work at the Department of Labor and Industry included workers' compensation and OSHA fines and penalties, logger assessments, license fee revenues, and payroll and administrative expenditures, including rent, utilities, professional and technical services, travel, supplies, equipment, and safety grants. This has not been a comprehensive audit of the Department of Labor and Industry. We did not examine the Special Compensation Fund benefits and assessments in this audit since they are separately examined during our annual audit of the state's general-purpose financial statements.