s MONTANASTATE LIBRARY S351.7232L72l]ch3c.1 353.39 DepartmentofCorrectionsandHumanServ L72DCHSP 1996 3 0864 00082713 2 Legislative Audit Division State of Montana Report to the Legislature Financial-Compliance Audit March 1996 For the Fiscal Year Ended June 30, 1995 Department of Corrections and Human Services - Selected Programs This letter report contains no recommendations to the Depart- ment of Corrections and Human Services. The audit was performed to ensure required continuous audit coverage of programs transferred to the Department of Public Health and Human Services as part of executive reorganization approved by the legislature. ^ATE DDCUmmS COLLECL'ON JUL 03 1996 S * -i, MONTANA STATE LIBRARY Hti U HHFElLrEiN?A*,^^.M^O-N6TtAhNAAVE. 59620 \k i Direct comments/inquiries to: Legislative Audit Division Room 135, State Capitol J PO Box 201705 MT 95SP-84A Helena 59620-1705 Digitized by the Internet Archive in 2010 with funding from IVIontana State Library http://www.archive.org/details/departmentofcorrect1996mont STATE OF MONTANA STATECAPITOL POBOX201705 HELENA,MONTANA 59620-1705 DEPUTY LEGISLATIVEAUDITORS: 406/444-3122 FAX406/444-3036 MARYBRYSON Operationsand EDPAudit LEGISLATIVEAUDITOR: JAMESGILLETT SCOTTA.SEACAT Financial-ComplianceAudit LEGALCOUNSEL: JIM PELLEGRINI JOHN W.NORTHEY PerformanceAudit March 14, 1996 The Legislative Audit Committee of the Montana State Legislature: Because of legislation passed by the 1995 Legislature to reorganize state government, we performed a limited scope financial-compliance audit of selected division's of the Department of Corrections (DOC) for fiscal year 1994-95. The scope of our audit was limited to the following divisions and bureaus of DOC that were transferred to the Department of Public Health and Human Services (PHHS) as of July 1, 1995: Mental Health Division Alcohol and Drug Abuse Division Special Services Division Reimbursement Bureau The objectives of this audit were to: 1. Determine if the financial activity recorded on the Statewide Budgeting and Accounting System (SBAS) for fiscal year 1994-95 was reasonable. 2. Assess compliance with selected laws and regulations. 3. Determine the implementation status of prior audit recommendations. 4. Make recommendations for improvements in internal and management controls. In performing the audit work, we used applicable standards set forth by the American Institute of Certified Public Accounts and the United States General Accounting Office. Prior Audit Recommendations The prior financial-compliance audit of the DOC included 21 recommendations. During the audit we followed up on the 20 recommendations that were partially or wholly applicable to the portions of the department that were transferred to PHHS. We found the department has implemented 13, partially implemented two, and did not implement five of the recommendations. We discussed the status of the recommendations with management of both DOC and PHHS. Based on these discussions and review of documentation, we determined that all seven of the recommendations Legislative Audit Committee March 14, 1996 Page 2 not fully implemented are currently being addressed by appropriate management and will be reviewed again during the next PHHS audit. Audit Results As a result of our audit work, we found the financial activity recorded on SBAS for fiscal year 1994-95 is reasonable, and the divisions and bureau are in compliance with state and federal laws and regulations specifically tested. As part of our audit, we also considered and tested the control system as it relates to our audit objectives. We found the control system was adequate to prevent or detect material errors. We make no recommendations at this time. More detailed audit work will be performed in the fiscal year 1995-96 and 1996-97 audit of PHHS. We would like to thank the directors and staffs of DOC and PHHS for their help and cooperation throughout the audit. Sincerely, Scott A. Seacat Legislative Auditor JC/v/c3.1tr