Alcohol and Drug Abuse, Commission on
1994 Statewide Financial and Compliance Audit
Report Number 95-114
Overall Conclusion
A material weakness exists in the control environment over the Commission's administration of state and federal grants. This material weakness is indicated by the type and number of problems identified in this report, including the following:
- Material weakness in administrative controls for the Prevention and Treatment of Substance Abuse Block Grant (CFDA 93.959)
- Significant misstatement of assets and failure to disclose liability information in a note to the financial statements
- Ineffective controls over the contracting process, including monitoring, obtaining audits, and audit resolution
Although known weaknesses in the administration of $160 million in state and federal grants were not corrected during fiscal year 1994, the Commission has indicated a commitment to correct the problems.
Key Findings
Inadequate contract monitoring of service providers and the lack of a methodology to establish rates for treatment services have resulted in a material weakness in administrative controls over the Commission's federal grants. Questioned costs totaling $3.1 million have been identified as a result of financial audits of two treatment providers.
The Commission has not established adequate audit resolution procedures for findings identified in their financial field audits, monitoring visits, and independent audit reports. Without an effective audit resolution process, federal funds are not available for their intended use. Also, the Commission may be required to repay the Federal Government for unresolved questioned costs.
The Commission does not have controls to identify high-risk service providers and continues to fund those with control structure and program deficiencies. This lack of controls, combined with ineffective communication between departments, jeopardizes $160 million in state and federal programs.
Currently the State Senate Investigative Committee is reviewing alleged fraud and misappropriation of state and federal funds at the Commission and its service providers. As of the date of this report, the results from this investigation were not available.
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