Financial-compliance audit, Board of Investments, Department of Commerce for the fiscal year ended June 30 ..

80 Pages·1992·1.8 MB·English

by  Montana. Legislature. Office of the Legislative Auditor

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354.88
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1992
Office of the Legislative Auditor
State of Montana
Report to the Legislature
Financial-Compliance Audit
December 1992
For the Two Fiscal Years Ended June 30, 1992
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Board of Investments MONTANA STATE LfBRARy
ur.A,}^ E- 6th AVE
"-LENA, MONTANA
59620
Department of Commerce
This report contains three recommendations to enhance
compliance with state laws and to improve internal controls and
accounting procedures. These recommendations address:
» Accounting for transactions related to bonds issued by the
board.
Electronic data processing enhancements.
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Direct comments/inquiries to:
Office of the Legislative Auditor
Room
135, State Capitol
92-3 Helena, Montana 59620
MONTANASTATELIBRARY
mil Inil111 II Hill II
0864 1002 4305 7
FINANCIAL-COMPLIANCE AUDITS
Financial-compliance audits are conducted by the Office ofthe Legislative Auditor to deter-
mine ifan agency's financial operations are properly conducted, the financial reportsare pre-
sented 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 stand-
ards set forth by the American InstituteofCertified Public Accountants and the United States
General Accounting Office. Financial-compliance auditstaff members hold degrees with an
emphasis in accounting. Most staff members hold Certified Public Accountant (CPA)
certificates.
The Single Audit Act of 1984 and OMB Circular A-128 require the auditor to issue certain
financial, internal control, and compliance reports regarding the state's federal financial
assistance programs, including all findings of noncompliance and questioned costs. This
individual agency audit report is not intended to comply with the Single Audit Act of 1984
OMB
or Circular A-128 and is therefore not intended for distribution to federal grantor
agencies. The Office of the Legislative Auditor issues a statewide biennial Single Audit
Reportwhich complies withthe reporting requirements listedabove. TheSingle Audit Report
for the two fiscal years ended June 30, 1991 has been issued. Copies of the Single Audit
Report can be obtained by contacting:
Office of the Legislative Auditor
Room
135, State Capitol
MT
Helena, 59620
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
Senator Greg Jergeson, Chairman Representative John Cobb, Vice Chairman
Senator Tom Keating Representative Larry Grinde
Senator Paul Svrcek Representative Mike Kadas
Senator Gene Thayer Representative Robert Pavlovich
STATE OF MONTANA
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STATECAPITOL
HELENA, MONTANA 59620
406/444-3122 DEPUTY LEGISLATIVEAUDITORS:
MARYBRYSON
Operationsand EDPAudit
JAMESGILLETT
LEGISLATIVEAUDITOR:
Financial-ComplianceAudit
SCOTTA.SEACAT
JIM PELLEGRINI
LEGALCOUNSEL:
PerformanceAudit
JOHNW.NORTHEY
December 1992
The Legislative Audit Committee
of the Montana State Legislature:
This is our financial-compliance audit report on the Board of Investments
of the Department of Commerce for the fiscal year ending June 30, 1992.
Included in this report are three recommendations addressing bond accounting
issues and electronic data processing enhancements. The board's written response
to the audit recommendations are included at the end of the audit report.
We thank the Executive Director and his staff for their assistance and
cooperation.
Respectfully submitted
Scott A. Seacat
Legislative Auditor
Digitized by the Internet Archive
in 2010 with funding from
IVIontana State Library
http://www.archive.org/details/financialcomplia1992mont
Office of the Legislative Auditor
Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 1992
Board of Investments
Department of Commerce
Members of the audit staff involved in this audit were: Laurie Evans,
Wayne D. Guazzo, Renee Holman, Cindy S. Jorgenson, DJ Kimball, Jim
Manning, and Patti J. Robertson.

Table of Contents
List of Tables iii
Appointed and Administrative Officials iv
Summary of Recommendations v
Introdnction Introduction
1
Background
1
Prior Audit Prior Audit Recommendations 5
Recommendations
Findings and Accounting Issues 6
Recommendations School District Refunding Bonds 6
Recording Bond Transactions 8
Error Correction on the Portfolio Management System 9
Independent Auditor's Summary of Independent Auditor's Reports A-2
&
Reports Agency
Financial Statements All Other Funds
:
Independent Auditor's Report A-5
Statement of Investments Managed
June 30, 1992 and 1991 A-7
Statement of Investment Income for the
Fiscal Years Ended June 30, 1992 and 1991 A-7
Statement of Changes in Investments
Managed for the Fiscal Years Ended
June 30, 1992 and 1991 A-8
Notes to the Financial Statements A-9
Short-Term Investment Pool
:
Independent Auditor's Report A-17
Statement of Net Asset Value June 30, 1992
and 1991 A-19
Statement of Changes in Net Asset Value
for the Fiscal Years Ended June 30, 1992
and 1991 A-20
Page
i
Table of Contents
Statement of Investment Income and
Distribution for the Fiscal Years Ended
June 30, 1992 and 1991 A-20
Notes to the Financial Statements A-2I
Montana Common Stock Pool
:
Independent Auditor's Report A-29
Statement of Net Asset Value June 30,
1992 and 1991 A-31
Statement of Changes in Net Asset Value
June 30, 1992 and 1991 A-31
Statement of Investment Income and
Distributions June 30, 1992 and 1991 A-32
Notes to Financial Statements A-33
Enterprise Fund
:
Independent Auditor's Report A-43
Balance Sheet as of June 30, 1992 A-45
Statement of Revenues, Expenses, and
Changes in Retained Earnings for the
Fiscal Year Ended June 30, 1992 A-46
Statement of Cash Flows for the Year
Ended June 30, 1992 Increase (Decrease)
in Cash and Cash Equivalents A-47
Notes to Financial Statements A-48
Agen<7 Response Board of Investments B-3
Page
ii
List of Tables
Table School Bond Accounting Errors 7
1
Page
iii
Appointed and Administrative Officials
Board of Investments
AdministratlTe Officials