Montana State Library Commission financial-compliance audit for the two fiscal years ended...

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Montana State Library
Commission
For the Two Fiscal Years Ended
June 30, 2021
A 2022
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Financial-Compliance Audits
Legislative Audit
Financial-compliance audits are conducted by the Legislative
Committee
Audit Division to determine if an agency’s financial operations
are properly conducted, the financial reports are presented
Representatives
fairly, and the agency has complied with applicable laws and
Kim Abbott
regulations. In performing the audit work, the audit staff uses
[email protected]
standards set forth by the American Institute of Certified Public
Denise Hayman, Chair
Accountants and the United States Government Accountability
[email protected]
Office. Financial-compliance audit staff members hold degrees
Emma Kerr-Carpenter
with an emphasis in accounting and many staff members hold
[email protected]
Certified Public Accountant (CPA) certificates.
Terry Moore
[email protected]
Matt Regier The Single Audit Act Amendments of 1996 and the Uniform
[email protected] Administrative Requirements, Cost Principles, and Audit
Jerry Schillinger Requirements for Federal Awards require the auditor to issue
[email protected] certain financial, internal control, and compliance reports in
addition to those reports required by Government Auditing
Senators
Standards. This individual agency audit report is not intended
Jason Ellsworth, Vice Chair
to comply with these reporting requirements and is therefore
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not intended for distribution to federal grantor agencies. The
John Esp
Legislative Audit Division issues a statewide biennial Single Audit
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Report which complies with the above reporting requirements.
Pat Flowers
[email protected] The Single Audit Report for the two fiscal years ended June 30,
Tom Jacobson 2021, was issued June 21, 2022. The Single Audit Report for the
[email protected] two fiscal years ended June 30, 2023, will be issued by March 31,
Tom McGillvray 2024.
[email protected]
Mary McNally
[email protected]
Members serve until a
member’s legislative term
of office ends or until a
Audit Staff
successor is appointed,
Jessica Curtis Leslie Lahti
whichever occurs first.
Courtney P. Johnson Karen e. Simpson
§5-13-202(2), MCA
Fraud Hotline Reports can be found in electronic format at:
(Statewide)
https://leg.mt.gov/lad/audit-reports
1-800-222-4446
(in Helena)
444-4446
[email protected]
www.montanafraud.gov
LEGISLATIVE AUDIT DIVISION

Angus Maciver, Legislative Auditor Deputy Legislative Auditors:
Deborah F. Butler, Legal Counsel Cindy Jorgenson
William Soller
August 2022
The Legislative Audit Committee
of the Montana State Legislature:
This is our financial-compliance audit report on the Montana State Library
Commission (library) for the two fiscal years ended June 30, 2021, and 2020. During
the audit, we analyzed the financial schedules, reviewed financial records, and tested
compliance with state laws and regulations. Our audit resulted in one recommendation
related to employee bonuses.
The library’s written response related to the audit recommendation is included in the
audit report on page C-1. The library partially concurs with the recommendation. As
part of our audit procedures, we considered the library’s e-mail correspondence with the
federal program officer. In that correspondence, management indicated the payments
were made in accordance with the state’s pay plan policy. We have determined, and
management has acknowledged, that the language required to be included in the pay
plan policy to govern bonus payments was not included in the policy in place during
the audit period. As such, we do not consider the bonus payments to have been made
in accordance with the state’s pay plan policy and our recommendation stands.
We issued unmodified opinions on the financial schedules for each of the two
fiscal years ended June 30, 2021, and 2020, which means the reader can rely on the
information in the schedules. The Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Schedules
Performed in Accordance With Government Auditing Standards does not report any
significant deficiencies, material weaknesses, or material noncompliance.
We thank the Montana State Library Commission and the State Librarian and her staff
for their cooperation and assistance throughout the audit.
Respectfully submitted,
/s/ Angus Maciver
Angus Maciver
Legislative Auditor
Room 160 • State Capitol Building • PO Box 201705 • Helena, MT • 59620-1705
Phone [phone] • FAX [phone] • E-Mail [email protected]

i
Table of Contents
Figures and Tables .....................................................................................................................ii
Appointed and Administrative Officials ..................................................................................iii
Report Summary ...................................................................................................................S-1
CHAPTER I – INTRODUCTION AND BACKGROUND ����������������������������������������������������������������������1
What We Did ...........................................................................................................................1
Background ...............................................................................................................................1
Prior Audit Recommendation ...................................................................................................4
CHAPTER II – FINDINGS AND RECOMMENDATION ����������������������������������������������������������������������5
Incentive Pay .............................................................................................................................5
INDEPENDENT AUDITOR’S REPORT AND
MONTANA STATE LIBRARY COMMISSION FINANCIAL SCHEDULES
Independent Auditor’s Report ...............................................................................................A-1
Schedule of Changes in Fund Equity for the Fiscal Year Ended June 30, 2021 ....................A-3
Schedule of Changes in Fund Equity for the Fiscal Year Ended June 30, 2020 ....................A-4
Schedule of Total Revenues & Transfers-In
for the Fiscal Year Ended June 30, 2021 ...............................................................................A-5
Schedule of Total Revenues & Transfers-In
for the Fiscal Year Ended June 30, 2020 ...............................................................................A-6
Schedule of Total Expenditures & Transfers-Out
for the Fiscal Year Ended June 30, 2021 ...............................................................................A-7
Schedule of Total Expenditures & Transfers-Out
for the Fiscal Year Ended June 30, 2020 ...............................................................................A-8
Notes to the Financial Schedules ..........................................................................................A-9
REPORT ON INTERNAL CONTROL AND COMPLIANCE
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Schedules Performed in Accordance With Government
Auditing Standards ..............................................................................................................B-1
LIBRARY RESPONSE
Montana State Library .........................................................................................................C-1
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ii Montana Legislative Audit Division
Figures and Tables
Figures
Figure 1 Sources of Revenue ................................................................................................................3
Figure 2 Expenditures ..........................................................................................................................4
Tables
Table 1 Library Bonus Funding Sources .............................................................................................5
iii
Appointed and Administrative Officials
Name City Term Expires
Montana State Kenning Arlistsch, Chair* Bozeman October 2022
Library Commission
Kristin Kerr, Vice Chair Helena June 2024
Tamara Hall Bozeman June 2022
Dalton Johnson Missoula June 2023
Peggy Taylor Whitefish June 2023
Robyn Scribner Geraldine June 2024
Elsie Arntzen Superintendent of Public Instruction
* Appointed by the Commissioner of Higher Education for the Montana
University System.
Montana State Jennie Stapp, State Librarian
Library
Evan Hammer, Digital Library Administrator
Malissa Briggs, Central Services Manager
For additional information concerning the Montana State Library
Commission, contact:
Malissa Briggs
Central Services Manager
1515 East Sixth Avenue
P.O. Box 201800
Helena, MT 59620-1800
e-mail: [email protected]
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#21-23 August 2022 S-1
M L a d
ontana egisLative udit ivision
Financial Compliance Audit
Montana State Library Commission
For the two Fiscal Years ended June 30, 2021
A report to the Montana Legislature
The Montana State Library is the source for
BACKGROUND
state government information, natural resources
Montana State Library
information, and geographic information for all
(library) serves the
Montanans. In fiscal year 2021, the library received
informational needs of all
$750,000 in funding in response to the pandemic,
branches of state government,
its agencies, local counterparts, which was used to launch a mobile hot spot and device
and individuals seeking lending program to address the need for internet access
information and materials not during the pandemic. During our audit we reviewed
found in their local libraries. the changes in financial activity and we found the
library was not in compliance with state policy or
The Montana State Library
federal regulation for incentive pay during the audit
Commission administers
period.
state and federal funding
to operate the state library;
AUDITOR’S OPINION (page A-1): UNMODIFIED
provides assistance and
We found the library’s financial schedules and note disclosures presented
advice to all tax-supported
fairly the activity of the library, in all material respects, and issued
libraries throughout the state;
unmodified opinions on them. This means that a reader can rely on the
maintains a library of reading
information in the library’s financial schedules and notes presented in the
material for Montanans
report.
unable to utilize printed
materials; and maintains a
For the full context of the library’s financial activity, see the financial
centralized clearinghouse for schedules and notes beginning on page A-4.
Montana’s natural resources
information and heritage, RECOMMENDATIONS:
preserves state publications, In this report, we issued the following recommendations:
and offers digital library To the library: 1
services to Montana residents To the legislature: 0
via the internet.
In this report, we determined the implementation status of recommendations
in the prior audit:
Fully Implemented: 1
Partially Implemented: 0
Not Implemented: 0
(continued on back)
S-2
For the full report or more Recommendation #1 (page 6):
information, contact the State Compliance, Federal Compliance
We recommend the Montana State Library comply with state policy
Legislative Audit Division.
and federal regulations regarding employee incentive pay.
leg.mt.gov/lad
Library response: Partially Concur
Room 160, State Capitol
PO Box 201705 RePoRt on inteRnaL contRoL and comPLiance
Helena, MT 59620-1705 (page B-1):
[phone] In this report, we identified the following:
Material Weaknesses in Internal Control: 0
Significant Deficiencies in Internal Control: 0
The mission of the Legislative
Material Non-Compliance: 0
Audit Division is to increase
Other Matters: 0
public trust in state government
by reporting timely and accurate For the full context of this information, including the distinction
information about agency between the types of items reported, see the report beginning on
operations, technology, and page B-1.
finances to the Legislature and
the citizens of Montana.
To report fraud, waste, or abuse:
Online
www.Montanafraud.gov
Email
[email protected]
Call
(Statewide)
[phone] or
(Helena)
[phone]
Text
[phone]