Audit Division

Audit Summary

Commission on Economic Development

Report LA96-21

Results in Brief

The Commission did not always follow its policies and procedures thus violating state budgetary and accounting laws. Because of budgetary shortfalls due to federal funding not materializing, the Commission made more than $70,000 of payments from unauthorized funding sources. It used Procurement Outreach Program monies for Small Business Revitalization expenditures, and used administrative account monies for Procurement Outreach Program expenditures. The Commission subsequently negotiated a $30,000 contract with the Commission on Tourism and an additional $50,000 from the State Energy Office to reimburse the appropriate accounts for the improper payments. Furthermore, the Commission did not document its reviews of the status of independent contractors for fiscal year 1995. The Commission also has not established policies and procedures to ensure contractors meet the criteria for independent contractors.

Principal Findings

1. The Commission used more than $57,000 of Procurement Outreach Program monies to pay Small Business Revitalization expenses and more than $13,000 of the administrative account appropriation to pay for Procurement Outreach Program expenses. The Commission developed policies and procedures to ensure the proper recording of transactions. However, because of budgetary shortfalls, management decided to bypass these policies and procedures. No provision in law allows one budget account or category to pay the expenses of another. (page 8)

2. Two of the 3 independent contractors examined may not meet the criteria for independent contractors. These contractors perform services for the Commission that closely resemble those of employees such as clerical and reception duties. (page 10)