Department of Agriculture, financial-compliance audit for the two fiscal years ended ...

46 Pages·1995·0.77 MB·English

by  Montana. Legislature. Legislative Audit Division

s
354.5
L72DA
1995
Legislative Audit Division
State of Montana
Report to the Legislature
Financial-Compliance Audit
October 1995
For the Two Fiscal Years Ended June 30, 1995
Department of Agriculture
This report contains Ave recommendations. Suggestions for
improvements in department operations include:
Recording of loans and interest receivable.
Compliance with state law to record transfers of trust fund
investment earnings, licensing of produce dealers and assess-
ment collections, and return-on-investment agreements.
SWTT
DOCUMENTS
COLLECTION
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08
1996
MONTANA
STATE L/BRARY
HHEFILErNM/AT,^.M.^O-N^T^A^NAAVE.
59620
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Direct comments/inquiries to:
L^islative Audit Division
Room 135, State Capitol
PO Box 201705
MT
95-18 Helena 59620-1705
MONTANA.STATELIBRARY
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3 0864 0010 3630 3
FINANCIAL-COMPLIANCE AUDITS
Financial-compliance audits are conducted by the Legislative Audit Division to determine if an
agency's financial operations are properly conducted, the financial reports are presented fairly,
and the agency has complied with applicable laws and regulations which could have a significant
financial impact. In performing the audit work, the audit staff uses standards set forth by the
American Institute of Certified Public Accountants and the United States General Accounting
Office. Financial-compliance audit staffmembers hold degrees with an emphasis in accounting.
Most staff members hold Certified Public Accountant (CPA) certificates.
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The Single Audit Act of 1984 and Circular A-128 require the auditor to issue certam
financial, internal control, and compliancereports regardingthestate's federal financial assistance
programs, including all findings ofnoncompliance and questioned costs. This individual agency
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audit report is not intended to comply with the Single Audit Act of 1984 or Circular A-128
and is therefore not intended for distribution to federal grantor agencies. The Legislative Audit
Division issues a statewide biennial Single Audit Report which complies with the reporting
requirements listed above. The Single Audit Reportfor the two fiscal years ended June 30, 1993
has been issued. Copies ofthe Single Audit Report can be obtained by contacting:
Legislative Audit Division
Room 135 State Capitol
PO Box 201705
MT
Helena 59620-1705
MEMBERS OF THE LEGISLATIVE AUDIT COMMIl EE
1
STATE OF MONTANA
STATECAPITOL
POBOX201705
HELENA,MONTANA 59620-1705
DEPUTY LEGISLATIVEAUDITORS:
406/444-3122
FAX[phone] MARYBRYSON
Operationsand EDPAudit
JAMESGILLETT
LEGISLATIVEAUDITOR:
SCOTTA.SEACAT Financial-ComplianceAudit
LEGALCOUNSEL: JIM PELLEGRINI
JOHNW.NORTHEY PerformanceAudit
October 1995
The Legislative Audit Committee
ofthe Montana State Legislature:
This is our financial-compliance audit report on the Department of Agriculture
for fiscal years 1993-94 and 1994-95. Included in this report are recommendations
concerning proper recording oftransactions on the accounting records and compliance
with state laws. The department's written response to the audit recommendations is
included in the back ofthe audit report.
We thank the director and his staff for their cooperation and assistance
throughout the audit.
Respectfully submitted,
leacat
Legislative Auditor
Digitized by the Internet Archive
in 2010 with funding from
Montana State Library
http://www.archive.org/details/departmentofagri1995mont
Legislative Audit Division
Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 1995
Department of Agriculture
Members ofthe audit staff involved in this audit were Frieda Houser,
Lorry Parriman, Patti J. Robertson and Kris Wilkinson.

Table of Contents
Appointed and Administrative Officials ii
Summary of Recommendations iii
Introduction Introduction 1
Background 1
Prior Audit Prior Audit Recommendations 4
Recommendations
Findings and Accounting Issues 5
Recommendations Noxious Weed Trust Fund Transfers 5
Chemical Groundwater Protection Act Transfer 6
State Compliance Issues 6
Produce Dealer Assessment Fee 6
Uncollectible Accounts and Interest Receivable 7
Return on Investment Agreements 8
IndepmdNit Auditor's Independent Auditor's Report A-3
&
Rqiort Agency
Financial Schedules Schedule of Changes in Fund Balances for
the Two Fiscal Years Ended June 30, 1995 A-5
&
Schedule ofBudgeted Revenue Transfers
&
In - Estimated Actual for the Fiscal
Year Ended June 30, 1995 A-6
&
Schedule of Budgeted Revenue Transfers
&
In - Estimated Actual for the Fiscal
Year Ended June 30, 1994 A-7
Schedule of Budgeted Program Expenditures &. Transfers
& &
Out by Object Fund - Budget Actual for the
Fiscal Year Ended June 30, 1995 A-8
Schedule ofBudgeted Program Expenditures «& Transfers
& &
Out by Object Fund - Budget Actual for the
Fiscal Year Ended June 30, 1994 A-9
Schedule of Additions and Deductions to Agency
Fund Property Held in Trust for the Two Fiscal
Years Ended June 30, 1995 A-10
Notes to the Financial Schedules A-11
AgNicy Response Department of Agriculture B-3
Page
i
Appointed and Administratiye Officials
Department of
Agriculture
Appointed and W. Ralph Peck Director
Administrative Officials
Sandra Kuchenbrod Administrator
Central Management Division
Gary L. Gingery Administrator
Agricultural Sciences Division
Will Kissinger Administrator
Agricultural Development Division
Administratively Montana Wheat and Barley Committee
Attached Committees
and Boards State Board ofHail Insurance
Montana Mint Committee
Alfalfa Seed Committee
Alfalfa Leafcutting Bee Committee
Agricultural Development Council
Noxious Weed Advisory Council
Page
ii
Summary of Recommendations
The listing below serves as a means of summarizing the recommendations contained in the report, the
department's response thereto, and a reference to the supporting comments.
Recommendation #1 We recommend the department properly record the
transfer of all Noxious Weed Management Trust
Fund investment earnings to the Special Revenue
Fund by fiscal year-end as required by state law 5
Agency Response Concur. See page B-3.
:
Recommendation #2 We recommend the department develop procedures to
ensure Qiemical Groundwater Protection Act payments
are made in accordance with state law 6
Agency Response Concur. See page B-3.
:
Recommendation ^3 We recommend the department implement procedures to
ensure all produce dealers are licensed and assessments
are submitted in accordance with state law 7
Agency Response Concur. See page B-4.
:
Recommendation #4 We recommend the department:
A. Follow its uncollectible procedures for writing
off loan receivable by fiscal year-end.
Agency Response Concur. See page B-4.
:
B. Record loan interest in the fiscal year it
is earned 8
Agency Response Concur. See page B-4.
:
Recommendation #5 We recommend the department ensure documentation
for consideration ofretum-on-investment agree-
ments is included in grant files 9
Agency Response Concur. See page B-4.
:
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