s 352.744 L72MSL 2005 Legislative Audit Division State ofMontana Report to the Legislature December2005 Financial-Compliance Audit For the Two Fiscal Years Ended June 30, 2005 Montana State Library Commission This report contains two recommendations to the Montana State Library Commission. The recommendations relate to: Federal Special Revenue Fund Account Balance Controls over Donation Receipts STATE DOCUMENTS COLLECTION pre 2 9 2005 M0N A TaE RARY TsK! Ayi HELENA, MONTANA 59620 Direct comments/inquiries to: Legislative Audit Division Room 160, State Capitol PO Box 201705 MT 05-22 Helena 59620-1705 Help eliminate fraud, waste, and abuse in state government. Call the Fraud Hotline at 1-800-222-4446 statewide or 444-4446 in Helena. MontanaStaleLibrary 3 0864 1003 6040 FINANCIAL-COMPLIANCE AUDITS Financial-compliance audits are conducted by the Legislative Audit Divisionto determine ifan agency's financial operations are properly conducted, the financial reports arepresented fairly, and the agency has complied with applicable laws andregulations. Inperforming the audit work, the audit staffuses standards set forth by the American Institute ofCertified Public Accountants and the United States Government Accountability Office. Financial-compliance audit staff members hold degrees with an emphasis in accounting. Most staffmembers hold Certified Public Accountant (CPA) certificates. Government Auditing Standards, the Single Audit Act Amendments of 1996 and OMB Circular A-133 requirethe auditorto issue certain financial, internal control, and compliance reports. This individual agency audit report is not intended to comply with these reporting requirements and is therefore not intended for distribution to federal grantor agencies. The Legislative Audit Division issues a statewidebiennial Single Audit Report, which complies withtheabove reporting requirements. The Single Audit Report forthe two fiscal years endedJune 30, 2005, will be issued by March 31, 2006. The Single Audit Report forthetwo fiscal years ended June 30, 2003, was issued on March 23, 2004. Copies ofthe Single Audit Report canbe obtained by contacting: Single Audit Coordinator Legislative Audit Division Office ofBudget and Program Planning Room 160, State Capitol State Capitol PO Box 201705 MT MT Helena 59620 Helena 59620-1705 Phone (406) 444-3616 MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE LEGISLATIVE AUDIT DIVISION Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors: John W. Northey, Legal Counsel Jim Pellegrini, Performance Audit & Tori Hunthausen, IS Audit Operations James Gillett, Financial-Compliance Audit December 2005 The Legislative Audit Committee ofthe Montana State Legislature: This is our financial-compliance audit report onthe Montana State Library Commission (Library) forthe two fiscal years ended June 30, 2005. This report contains two recommendations related to compliance with state and federal laws and policies. This report also contains a disclosure issue regarding the periodical database. The Library's written response to the audit recommendations is included on page B-3 ofthe audit report. Wethank the Montana State Library Commission, the State Librarian, and the library stafffortheir cooperation and assistancethroughout the audit. jectfully submitted Seacat Legislative Auditor Room 160, StateCapitol BuildingPO Box 201705 Helena, MT 59620-1705 Phone(406)444-3122 FAX (406)444-9784 E-Mail [email protected] Legislative Audit Division Financial-Compliance Audit For the Two Fiscal Years Ended June 30, 2005 Montana State Library Commission Members ofthe audit staffinvolved in this audit were Jeane Carstensen-Garrett, Rick Eneas, and Amber Thorvilson. Digitized by the Internet Archive in 2010 with funding from Montana State Library http://www.archive.org/details/montanastatelibr2005mont Table of Contents Appointed and Administrative Officials ii Report Summary S-l Introduction 1 Introduction 1 Background 1 PriorAudit Recommendations 2 Findings and Recommendations 3 Federal Special Revenue Fund Account Balances 3 Controls Over Donations Receipts 4 Disclosure Issue 5 Periodical Database 5 & Independent Auditor's Report Library Financial Schedules A-l Independent Auditor's Report A-3 Schedule ofChanges in Fund Balances Forthe Fiscal Year Ended June 30, 2005 A-5 Schedule ofChanges in Fund Balances Forthe Fiscal Year Ended June 30, 2004 A-6 & Schedule ofTotal Revenues Transfers-In Forthe Fiscal YearEndedJune 30, 2005 A-7 & Schedule ofTotal Revenues Transfers-In Forthe Fiscal Year Ended June 30, 2004 A-8 & Schedule ofTotal Expenditures Transfers-Out Forthe Fiscal Year Ended June 30, 2005 A-9 & Schedule ofTotal Expenditures Transfers-Out Forthe Fiscal Year Ended June 30, 2004 A-10 Notes to the Financial Schedules A-l 1 Library Response B-l Montana State Library B-3 Page i Appointed and Administrative Officials Montana State Library Commission Report Summary Montana State Library This report documents theresults ofour financial-compliance audit Commission ofthe Montana State Library Commission (Library) forthe two fiscal years ended June 30, 2005. Theprevious audit report contained no recommendations. We issued an unqualified opinion onthe financial schedules contained inthis report. This means the readercan rely on thepresented financial information and the supporting data on the state's accountingrecords This report contains two recommendations related to & compliancewith state federal laws and policies. This report also contains a disclosure issueregarding the periodical database. The Library's response to our recommendations begins on page B-3. The listing below serves as a means ofsummarizing the recommendations contained inthe report, the Library's responsethereto, and a referenceto the supporting comments. Recommendation #1 We recommend the Library analyze its federal special revenue fund accounts as required by stateaccountingpolicy and resolve identified errors Agency Response Concur. See page B-3. : Recommendation#2 We recommend the Library establish controls overdonations in accordance with state policy Agency Response Concur. SeepageB-3. : Page S-l