Department of Corrections (formerly Department of Corrections and Human Services) financial-compliance audit for the two fiscal years ended June 30 ..

68 Pages·1996·1.5 MB·English

by  Montana. Legislature. Legislative Audit Division

353.39
L72DC
1998
Legislative Audit Division
State ofMontana
Report to the Legislature
May 1999 Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 1998
Department of Corrections
This report contains 12 recommendations to the Department ofCorrections.
Issues in the report include:
»- Inadequate controls over payroll.
* Comphancewith laws relatingto contracting for services.
* Disposition ofcontraband.
STA7T DOCUMENTS
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FINANCIAL-COMPLIANCE AUDITS
Financial-compliance audits are conductedbythe LegislativeAudit Divisionto determine ifan
agency's financial operations areproperly conducted, the financial reports arepresented fairly, and
the agencyhas complied widi applicable laws andregulations. Inperformingthe auditwork, the
audit staffuses standards set forthbythe American histitute ofCertified Public Accountants andthe
United States General Accounting Office. Financial-compliance audit staffmembers holddegrees
with an emphasis in accounting. Most staffmembers hold Certified Public Accountant (CPA) cer-
tificates.
GovernmentAuditing Standards, the Single AuditActAmendments of 1996 and 0MB Circular
A-133 requirethe auditorto issue certain fmancial, internal control, andcompliancereports. This
individual agency auditreportis notintendedto complywiththesereportingrequirements and is
thereforenot mtended fordistributionto federal grantor agencies. The LegislativeAudit Division
issues a statewide bienmal SingleAudit Reportwhich complies widithe abovereporting
requirements. The Single Audit Report forthetwo fiscalyears endedJune 30, 1999, will be issued
by March 31, 2000. Copies ofthe SingleAudit Report, when available, can be obtainedby
contacting;
SingleAuditCoordinator LegislativeAudit Division
OfficeofBudget and Program Planning Room 135, State Capitol
State Capitol PO Box 201705
Helena MT 59620 HelenaMT 59620-1705
Phone [phone]
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
Senator Linda Nelson, Vice Chair Representative Bruce Simon, Chair
Senator Reiny Jabs Representative Beverly Barnhart
Senator Ken Miller Representative Mary Anne Guggenheim
Senator Barry "Spook" Stang Representative Dick Haines
Senator Mike Taylor Representative Robert Pavlovich
Senator Jon Tester Representative Steve Vick
LEGISLATIVE AUDIT DIVISION
Scott A. Seacat. Legislative Auditor Deputy Legislative Auditors:
John W. Northe> Legal Counsel Jim Pellegrini, Performance Audit
,
Tori Hunthausen, IT & Operations Manager James Gilleii. Financial-Compliance Audit
May 1999
The Legislative Audit Committee
ofthe Montana State Legislature:
This is ourfmancial-comphance audit report on the Department ofCorrections forthe two
fiscal years endedJune 30. 1998. This report contains 12 recommendations concermng
controls overpavToll, compliancewith purchasmgrequirements and monitoring ofservice
contracts, properrecording ofoperating transfers anddisposition ofcontraband. The
department's writtenresponse to auditrecommendations is included at the endofthe audit
report.
We thank the director and his stafffortheir assistance and cooperation throughoutthe audit.
Respectfully submitted.
Scott A. Seacat
Legislative Auditor
Room 135, State Capitol Building, PO Box 201705 Helena MT 59620-1705
Phone [phone] FAX [phone] E-Mail [email protected]
Digitized by the Internet Archive
in 2010 with funding from
IVIontana State Library
http://www.archive.org/details/departmentofcorr1998mont
Legislative Audit Division
Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 1998
Department of Corrections
Members ofthe audit staffinvolved in this audit were Pearl M. Allen.
Christopher G. Darragh, Laune Evans, Emlyn Neuman-Javomik, Lorry
Parriman, and Julie Ripley.

' 811
Table of Contents
List ofTables Page iii
Appointed and Administrative Officials Page iv
Report Summary Page v
Introduction Introduction and Scope Page 1
Background Page
1
Administration and Support Services Page 2
Communit>- Corrections Page 2
Secure Care Facilities Page 2
Montana Correctional Enterprises Page 3
Prior Audit Prior Audit Recommendations Page 5
Recommendations
Findings and Pa\Toll Controls Page 7
Recommendations Fraudulent& Inaccurate Time Reporting Page 7
Input Errors Page 8
W-4 Forms Page 9
Operating Transfers Page 1
Contracts Page 1
Compliancewith Purchasuig Agreement and Unsigned
Contracts Page
1
Unallowable Charges to Contract Page 12
Care and Custody ofJuveniles Page 13
Vehicles Page 14
Employees Not Taxed on Vehicle Use Page 16
Disposition ofContraband Page 16
Comphance Page 17
Prison Hobby Shop Contractor Page 17
Resident Accounts Page
1
Independent Auditor's Independent Auditor's Report Page A-3
Report & Department
Financial Schedules Schedule ofChanges in Fund Balances & Property Held in
Trust For the Fiscal Year Ended June 30, 1998 . Page A-5
Page
i
7
Table of Contents
Schedule ofChanges in Fund Balances & Property- Held m
Trust Forthe Fiscal Year Ended June 30. 1997 Page A-7
&
Schedule ofTotal Revenues Transfers-In
For the Fiscal Year Ended June 30, 1998 Page A-9
&
Schedule ofTotal Revenues Transfers-In
Forthe Fiscal YearEnded June 30, 1997 PageA-11
&
Schedule ofTotal Expenditures Transfers-Out
Forthe Fiscal Year Ended June 30, 1998 Page A-13
&
Schedule ofTotal Expenditures Transfers-Out
Forthe Fiscal Year Ended June 30, 1997 Page A-15
Notes to the Financial Schedules Page A-1
Supplemental Schedule Department ofCorrections
&
Schedule ofAdditions Deductions to Agency Fund
Property' Held in Trust Forthe Two Fiscal Years Ended
June 30, 1998 Page A-23
Department Response Department ofCorrections Page B-3
Page
ii
List of Tables
Table Department ofCorrections Organizational Chart Page 4
1
Page
iii
Appointed and Administrative Officials
Director's Office