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 Office of the Comptroller of the Commonwealth (CTR) for the period July 1, 2017 through June 30, 2019.
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 and the conclusion we reached regarding each objective.
To achieve our objectives, we gained an understanding of CTR’s internal control environment related to our audit objectives by reviewing agency policies and procedures, as well as conducting inquiries with CTR’s staff and management. We reviewed and tested the operating effectiveness of internal controls regarding CTR’s employee payroll, expense reimbursements, and non-payroll expenditures.
Additionally, we performed the procedures described below.
Employee Payroll and Expense Reimbursements
To determine whether CTR paid employees within six days of the end of the pay period in which wages were earned, as required by Section 148 of Chapter 149 of the General Laws, we obtained a list of all 11,516 payroll transactions recorded in the Massachusetts Management Accounting and Reporting System (MMARS) during the audit period, which totaled $14,332,851. For each transaction, using electronic spreadsheet functionality, we calculated the number of days from the end of the pay period to the biweekly paycheck date to determine whether the paychecks were issued within the required six-day timeframe.
To determine whether CTR reimbursed its employees for allowable employee expenses in accordance with Section 148 of Chapter 149 of the General Laws and CTR’s Employee Benefits & Policies Manual, we obtained a list of all 214 weekly payroll expense reimbursement transactions recorded in MMARS during the audit period, which totaled $22,548. We selected a judgmental, nonstatistical sample of 35 transactions and reviewed each one for receipts for employee out-of-pocket expenses, employee affidavits of expenses (e.g., public transportation fares), mileage logs or destination calculations, and travel authorization forms.
To determine whether CTR paid its vendors in accordance with its Operations Guide and 815 CMR 4.03(1)(e), we obtained a list of all 779 vendor payment transactions recorded in MMARS during the audit period, which totaled $3,315,688. We selected a judgmental, nonstatistical sample of 40 (totaling $887,715) of the 779 transactions and reviewed the vendor invoice for each one to verify that the correct vendor was paid the correct amount and that the expenditure was appropriately classified.
To determine whether CTR paid its vendors within 45 days for all 779 of these transactions, we used electronic spreadsheet functionality to calculate the number of days from the date CTR received the invoice or the date it received the goods or services, whichever occurred later, to the date of payment.
To determine whether CTR used prompt payment discounts when available, we reperformed CTR’s query that identifies full discounts taken, partial discounts taken, and missed discounts. We recalculated full discounts taken, partial discounts taken, and missed discounts for all 779 of the transactions discussed above.
When sampling, we used a nonstatistical sampling method, whose results we could not project to the entire population.
In 2018, OSA performed a data reliability assessment (DRA) for MMARS for the period April 1, 2017 through March 31, 2018. The DRA focused on reviewing selected system controls, including access, security awareness, audit and accountability, configuration management, identification and authentication, and personnel security.
During this audit, we made inquiries with CTR management to identify and assess changes that occurred after our 2018 DRA. We requested confirmation that policies or procedures had not changed for areas where no issues were noted. For areas where issues were noted, we reviewed CTR’s progress on resolving the issues.
To determine the reliability of CTR’s list of MMARS payroll and employee expense reimbursement transactions, we interviewed agency officials who were knowledgeable about the data and reconciled the aggregate amount of CTR’s payroll and employee expense reimbursements during our audit period to the Governor’s budget website. We determined that the list of payroll and employee expense reimbursement transactions was sufficiently reliable for the purpose of this audit.
To determine the reliability of CTR’s list of MMARS vendor payment transactions, we interviewed agency officials who were knowledgeable about the data and reconciled the aggregate amount of CTR’s vendor payment transactions during our audit period to the Governor’s budget website. We determined that the list of vendor payment transactions was sufficiently reliable for the purpose of this audit.
Our audit revealed no significant instances of noncompliance that must be reported under generally accepted government auditing standards.
|Date published:||September 28, 2020|