Results in Brief

Although the Office of State Controller generally complied with applicable laws and regulations, we found several instances of non-compliance. The Office had weaknesses in its controls for recording and depositing payments received and ensuring adequate documentation for travel expenditures. In addition, the Office did not comply with certain laws related to payment processing, debt collection, and personnel administration. These weaknesses stem from a lack of adequate policies and procedures to ensure resources are properly safeguarded and full compliance with state laws.

Principal Finding

· The Controller’s Office has poor controls over payments received. The Office received more than $100 million in checks, yet it did not always record these payments on a receipt log. Of the 58 transactions we tested, 25 transactions totaling $573,000 were not recorded on a log. (page 5)

· Checks were not always deposited within the time required by state law. For example, we tested 57 checks received from cities and counties and found 9 checks totaling $3.4 million were deposited late. In addition, the Office did not document the date of receipt for 13 checks, therefore, we could not determine if these payments were deposited timely. (page 6)

· The Office did not always document that travel expenditures were incurred in the transaction of state business. Sixteen trips lacked adequate doc-umentation to show how the travel and nature of events attended related to state business. (page 7)

· The 1997 Legislature passed a law to significantly reduce the number of checks issued by the State. Unless the Controller determines that earlier payment is necessary, NRS 227.215 requires claims to be accumulated until the amount owed reaches at least $25. This law has not been implemented, and the State missed the opportunity to design these requirements into the state’s new accounting system started in 1997. (page 8)

· The Office did not always take action to collect monies owed to the State from payroll overpayments. Although Central Payroll notified the Office of overpayments totaling $7,300, collection efforts were not taken on $2,750 of this amount during fiscal year 1999. Furthermore, the Attorney General was not notified to pursue collection of $5,100 from individuals who had not paid. (page \

9)

Office of State Controller

Agency Response

to Audit Recommendations

Recommendation Number		Accepted	Rejected
1	Develop written policies and procedures to ensure all payments are properly recorded when received and deposited in accordance with NRS 353.250	X
2	Develop written procedures to ensure the total amount of payments received each day is compared to deposit records by someone independent of the receipt and deposit process	X
3	Centralize the location where payments are received	X
4	Document the entire transaction for travel expenditures including documentation of the state business that was conducted	X
5	Perform a thorough cost benefit analysis for implementing state requirements for processing claims of less than $25	X
6	Develop written policies and procedures to ensure adequate separation of duties for the payroll overpayment process	X
7	Develop written policies and procedures to ensure timely action is taken to collect monies owed the State from payroll overpayments	X
8	Develop procedures to ensure employee performance evaluations are prepared as required by NRS 284.340	X
TOTALS		8	0

Results in Brief

Agency Response

Number

Accepted

Rejected