Audit Division

Audit Summary

 

Integrated Financial System

Expenditure And Budgetary Process

Report LA00-19

 

Results in Brief

            The Integrated Financial System controlled and processed expenditure and budgetary information as designed.  Expenditure and budgetary transactions for the online agencies processed through the IFS as intended and were accurately reflected on the budgetary and financial reports.  However, certain system controls over user capability need to be improved.  In addition, policies and procedures, in general, need to be better documented.  Internal controls are critical to the management of any program helping to ensure management’s objectives are carried out.  IFS controls should be developed and documented to provide reasonable assurance transactions continue to process as intended.

 

Principal Finding

·                   
The IFS is designed to prevent an agency from overspending its budgetary    authority.  If a system user attempts to overspend the budgetary authority, the transaction will not process and an error message will be generated.      However, certain users can over-    ride this error message, thus allowing the transaction to process.  This could result in an over expenditure of the          budgeted authority.  (page 8)

·                    Procedures to modify budget authority options in the IFS have not been          formalized.  Consequently, it is possible for budget options to be modified without proper documentation and approval.  Without a documented process for             modifying budget authority options, a risk exists that budgetary transactions may       not be processed as intended.  (page 8)

·                    Procedures for authorizing and modifying user access are not adequately defined    or documented.  As such, there are no guidelines to define the proper level of     security to assign a new user.  In addition, changes to the initially authorized   security level can be made informally without documentation or evidence of         justification.  This could diminish the financial integrity of the IFS.  (page 9)

·                    The IFS is not configured to restrict the approval of transactions by only the     agency with authority over the impacted budget account.  Consequently, indi-  viduals have the ability to approve transactions not under their scope of authority.         This increases the risk that transactions could be processed accidentally or         intentionally by unauthorized individuals.  (page 10)

·                    The implementation of the IFS has resulted in changes to state expenditure and        budgetary controls that need to be better documented.  Without proper      documentation, there is an increased risk that processes will be undefined and     management objectives will not be carried out. (page 11)

Integrated Financial System

Expenditure And Budgetary Process

Agency Response

to Audit Recommendations

 

Recommendation Number		Accepted	Rejected
1	Develop policies and procedures for the assignment, modification, and use of the override capabilities	X
2	Develop policies and procedures to ensure adequate monitoring and control of the budget authority options of the IFS	X
3	Develop policies and procedures to control the assignment and modification of system access to users	X
4	Configure the IFS to prohibit the approval of transactions outside a user’s authority	X
5	Review the operational capabilities of the IFS.  Subsequent to this review, develop and document policies and procedures related to the processing of expenditure and budgetary transactions	X
TOTALS		5	0