Overview
In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor (OSA) has conducted a performance audit of certain activities of the Massachusetts Office of Business Development (MOBD) for the period July 1, 2015 through June 30, 2017.
We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.
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Objective |
Conclusion |
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Yes |
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No; see Finding 1 |
To achieve our audit objectives, we gained an understanding of the internal controls we determined to be relevant to those objectives and accordingly tested the controls’ operating effectiveness over the awarding, payment, and monitoring of grants awarded through the REDO Grant Program. We conducted further testing as described below.
To gain an understanding of MOBD practices regarding the awarding and payment of grants through its REDO Grant Program, we reviewed pertinent laws (Sections 3J and 3K of Chapter 23A of the General Laws), reviewed MOBD policies, and interviewed management and staff members involved in these functions. We selected all 18 grants awarded during the audit period to verify that in each case, MOBD personnel reviewed the application, MOBD’s review committee reviewed and scored the application, the Executive Office of Housing and Economic Development approved the recommendation, and the director of MOBD executed a contract with the REDO.
We tested all 63 payments MOBD made to REDOs during the audit period to verify that MOBD’s chief operating officer approved each REDO payment request and that the REDOs submitted the required performance reports.
In addition, we selected a nonstatistical sample of 4 out of 18 reports and requested documentation (such as lists of training events, business development seminars, and attendees) to determine whether REDOs had sufficient documentation to support the information in their final progress reports for fiscal years 2016 and 2017. Since we used nonstatistical sampling, we did not project the results to the population.
Finally, we interviewed MOBD staff members regarding the status of the Buy Massachusetts Program and were told that the program had never been implemented.
Data Reliability
We obtained appropriation and expenditure data from the Massachusetts Management Accounting and Reporting System (MMARS). In 2018, OSA performed a data reliability assessment of MMARS that focused on testing selected system controls (i.e., access controls, application controls, configuration management, contingency planning, and segregation of duties) for the period April 1, 2017 through March 31, 2018. The office conducted a similar assessment of MMARS in 2014. Further, as part of our current audit, we reviewed selected security management controls for updated policies on security awareness and personal security, and we tested those policies as they relate to MMARS users. In addition, we selected a random sample of 10 payments from MMARS and traced the information to physical requests for payment. We determined that the information obtained from MMARS for our audit period was sufficiently reliable for the purposes of our audit work.
| Date published: | June 20, 2019 |
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