A Performance Audit
An Audit Report on Financial Processes at the Veterans Commission
May 2018
Summary Analysis
The Veterans Commission (Commission) has established controls to help ensure that it administers financial transactions in accordance with applicable statutes, rules, and Commission policies and procedures. Specifically, the Commission:
- Submitted accurate and supported funding drawdown requests to the U.S. Department of Veterans Affairs.
- Approved travel reimbursements according to its policies, reimbursed for only allowable expenses, and paid travel reimbursements within the required timeframes.
- Processed contract and grant payments in accordance with applicable requirements.
- Processed payroll transactions in accordance with applicable requirements.
However, the Commission should ensure that it (1) consistently submits accurate funding drawdown requests to the U.S. Department of Labor, (2) strengthen its review process for travel expenditures to detect errors, and (3) report contract information accurately to the Legislative Budget Board and on the Commission’s Web site. The Commission also should strengthen access controls to help ensure the integrity of critical information in its information systems.
The Commission had processes to ensure that its requests for awarded federal grant funding, called drawdowns, generally complied with applicable requirements. However, it did not consistently review the drawdowns for accuracy. The Commission did not have detailed policies and procedures for preparing and submitting its DOL drawdowns, including procedures for reviews of those drawdowns. Auditors tested 4 DOL drawdowns and identified calculation errors for 2 (50 percent) of those drawdowns.
The Commission had controls to ensure that travel expenditures complied with certain requirements. Specifically, for all travel vouchers tested, the Commission:
- Approved travel reimbursements according to Commission policies.
- Reimbursed for only allowable expenses.
- Paid travel reimbursements within 45 days as required by its policies.
In addition, the Commission’s process requires all travel expenditures to be reviewed to verify compliance with applicable requirements. However, the Commission should strengthen that review process to verify compliance with all requirements. Nine (24 percent) of 37 travel vouchers that auditors tested contained exceptions to applicable requirements. While the identified exceptions did not result in significant financial loss for the Commission, not having a sufficient review process increases the risk that significant errors could occur and remain undetected.
The Commission had controls to ensure that contract payments complied with applicable requirements. Specifically, for all 28 contract payments tested:
- The payment amount matched the supporting documentation.
- The supporting documentation included approval of the payment by the Commission’s purchasing or program staff.
- Someone other than the preparer reviewed the payment.
However, the Commission did not ensure that contract information it is required to post on its Web site was accurate and did not always report contract information to the Legislative Budget Board as required. The Commission asserted that its purchasing staff had not implemented a procedure for creating the contract population. As a result, it entered the contract information directly into the Legislative Budget Board’s database without a documented review, which resulted in the errors.
The Commission had controls to make grant payments in accordance with applicable laws, regulations, and internal policies and procedures. Specifically:
- For all 30 grant payments tested, the payment amount matched the supporting documents that the grantee provided.
- For all 30 grant payments tested, the payment request was reviewed and the payment approved according to Commission policy.
- For all 28 grant payments tested for which the grantee was required to provide a financial report prior to the payment, the Commission appropriately withheld payment for 11 grantees until those grantees submitted the required report.
The Commission had controls in place to help ensure that it accurately processed payroll transactions in accordance with applicable rules, regulations, and internal policies and procedures. Specifically, the Commission:
- Accurately processed and completed all eight payroll transactions tested.
- Had adequate supporting documentation for all eight payroll transactions tested.
- Ensured that those transactions were released in the Uniform Statewide Payroll/Personnel System (USPS) by someone other than the preparer.
In addition, the Commission had controls in place to help ensure that it accurately processed payroll changes in accordance with applicable rules and regulations and internal policies and procedures. Specifically, the Commission:
- Accurately processed and completed all 25 payroll changes tested.
- Ensured that all 25 payroll changes tested were based on appropriately approved Personnel Action Forms and entered into USPS within the timeframes required by Commission policy.
The Commission had controls and processes to ensure the reliability of its financial data. However, the Commission did not consistently perform user access reviews and it did not consistently restrict access to its data in the Centralized Accounting and Payroll/Personnel System (CAPPS) and Uniform Statewide Payroll/Personnel System (USPS).
- Three (4 percent) of 74 active CAPPS accounts tested were assigned to former employees. Two of those three accounts had read-only access.
- Four (21 percent) of 19 active USPS accounts tested had access that the Commission determined did not match the employees’ job responsibilities.
Graphics, Media, Supporting documents