Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Natural Resources
Internal Controls and Compliance Audit

 

Financial Audit Division Report 14-13

Released April 17, 2014

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Conclusion

The Department of Natural Resources generally had adequate internal controls over the financial areas we reviewed. However, the department’s internal controls were not adequate to ensure the accuracy of payroll transactions and ensure that payroll costs charged to dedicated funds and accounts corresponded to the work the employees performed.

For the items we tested, the department generally complied with significant finance-related legal requirements contained in statutes, laws, rules, and policies. However, we found some instances of noncompliance.

Key Findings

• The Department of Natural Resources did not adequately verify the accuracy of hours worked and allocation of payroll costs for employees that did not complete their own timesheets and direct supervisors that did not approve their hours in the state’s automated time reporting system. In addition, the department did not review a key payroll system report to ensure the overall accuracy of payments to employees. This is a repeat finding.¹
• The Department of Natural Resources did not always document its reasons for making payroll adjustments that moved costs between dedicated accounts.
• The Department of Natural Resources did not adequately mitigate the risk created by employees with incompatible access to the state’s accounting system.
• The Department of Natural Resources did not comply with certain state grant policies and department guidelines for grants paid from the Outdoor Heritage Fund and the Environment and Natural Resources Trust Fund.

Audit Objectives and Scope

Objectives	Period Audited
Internal controls Compliance	July 1, 2010, through February 28, 2013
Selected Audit Areas
System security access Payroll and travel expenditures Dedicated accounts Internal cost allocations	Outdoor Heritage Fund grants Environment and Natural Resources Trust Fund grants Permanent School Fund

 

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¹ Office of the Legislative Auditor’s Financial Audit Division Report 09-02, Department of Natural Resources, issued January 15, 2009, Finding 11.