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An Audit Report on Financial Processes at the Juvenile Justice Department

July 2016

Summary Analysis

While the Juvenile Justice Department (Department) should strengthen its policies and procedures for financial processes, it generally had controls in fiscal year 2015 to ensure that it administered financial transactions in accordance with applicable statutes, rules, and its existing policies and procedures.

However, the Department should improve certain controls over expenditures, financial reporting, and access to its key financial information systems.

 Jump to Overall Conclusion

The Juvenile Justice Department (Department) had documented policies and procedures that addressed some of its financial processes. However, the policies and procedures were out of date, not sufficient, and/or did not exist for several of the areas audited. An absence of documented policies and procedures caused many of the issues discussed in the other chapters of this report.

Jump to Chapter 1 

The Department had adequate controls over juvenile probation grants. It appropriately supported and approved all juvenile probation grant payments tested, approved juvenile probation departments’ budgets, and monitored juvenile probation departments’ expenditures by reviewing external audit reports that juvenile probation departments submitted.

Jump to Chapter 2-A 

The Department had adequate controls over significant financial processes related to travel expenditures, and it complied with most of the travel requirements and Department travel policies and procedures that auditors tested.

Jump to Chapter 2-B 

All expenditures that auditors tested were allowable, and the Department coded them properly in its accounting system (the Centralized Accounting and Payroll/Personnel System, or CAPPS). However, the Department should consistently maintain documentation of its approvals of those expenditures. The Department should also improve controls over procurement cards and fuel cards and its reviews of expenditures that employees make using those cards.

Jump to Chapter 3 

All year-end accounting adjustments the Department made during its annual financial reporting process were appropriate. However, the Department’s fiscal year 2015 annual financial report contained errors in the balances presented for capital assets and long-term liabilities. Specifically, capital assets was understated by $63,766, and the beginning balance of employees’ compensable leave (a long-term liability) was understated by $3,875,978. In addition, the Department did not meet certain Office of the Comptroller of Public Accounts reporting due dates for annual financial report certifications. Specifically, the Department submitted 5 (28 percent) of 18 required annual financial report certifications from 10 to 38 days late, and it did not formally document its review and approval of 16 of those certifications. The Department also should (1) maintain documentation to support its required year-end reconciliation of balances in CAPPS and in the Uniform Statewide Accounting System (USAS) and (2) perform a year-end reconciliation of its capital asset balances in CAPPS, the State Property Accounting system, and USAS.

Jump to Chapter 4 

The Department should improve how it grants access to CAPPS and USAS. In addition, the Department did not properly restrict high-level access rights to CAPPS, 20 former employees still had access to CAPPS, and 18 current employees could process payments in CAPPS without secondary review and approval.

Jump to Chapter 5 

Graphics, Media, Supporting documents

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