Department of Energy Resources Examination of Internal Control Questionnaire
December 8, 2015 · Read the full official report (PDF) ↗
Published December 8, 2015 Audit covers July 1, 2014 – June 30, 2015 Under Suzanne M. Bump · 2011–2023
source
“DOER’s 2015 ICQ had inaccurate responses on the subject of its capital-asset inventory.”
Read the plain-English breakdown
This is a limited audit of the Massachusetts Department of Energy Resources, focused on whether some of its internal-control answers were accurate.
“I am pleased to provide this limited-scope performance audit of the Department of Energy Resources.”
The audit checked whether DOER’s answers to the state comptroller about its internal controls were truthful and supported.
“The objective of our audit was to determine whether certain responses provided by DOER to OSC in its fiscal year 2015 ICQ were accurate.”
Bad information makes it harder for the state to judge whether an agency is properly tracking money, property, and controls.
“Inaccurate information on the ICQ prevents OSC from effectively assessing the adequacy of DOER’s internal control system for the purpose of financial reporting.”
DOER is a taxpayer-funded agency, so accurate records help protect public property from loss, misuse, or poor tracking.
“DOER had a fiscal year 2015 budget of $5,237,986 and has approximately 59 full-time employees.”
The main problem was not energy policy; it was basic recordkeeping around furniture and inventory reporting.
“Some of the information that the Department of Energy Resources (DOER) reported in its Internal Control Questionnaire (ICQ) to the Office of the State Comptroller (OSC) for fiscal year 2015 was inaccurate or not supported by documentation.”
DOER said it would add procedures to its internal controls and start annually inventorying the relevant office furniture.
“We are already working to correct the office furniture inventory concerns by first adding this procedure to our internal controls plan.”
The risk is that without proper inventories and procedures, state-owned assets may not be fully protected or accurately recorded.
“Without performing and documenting a physical inventory or establishing procedures that encompass all phases of the inventory process, DOER is not ensuring that its capital assets are properly safeguarded against loss, theft, or misuse and that its inventory records are complete and accurate.”
An ICQ is a yearly questionnaire agencies use to report whether their internal checks and safeguards are working.
“The purpose of the ICQ is to provide an indication of the effectiveness of the Commonwealth’s internal controls.”
2 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Determine whether certain responses provided by DOER to OSC in its fiscal year 2015 ICQ were accurate.
What the Auditor found
Why it matters: Inaccurate ICQ information prevents OSC from effectively assessing DOER's internal control system for financial reporting.
Standard: OSC's ICQ and fixed-asset policies require accurate reporting of capital assets and documented inventory procedures, including recording non-GAAP assets with an original cost between $1,000 and $49,999 and reconciling them at least annually. ( Section 12 of Chapter 11 of the Massachusetts General Laws; OSC’s Accounting and Management Policy and Fixed Assets—Acquisition Policy )
2 recommendations
- DOER should address the audit issues and ensure accurate ICQ reporting of capital assets and inventory procedures in accordance with OSC requirements.agency: agreed
- DOER should request guidance from OSC if necessary.agency: agreed
Agency response & Auditor reply
Agency: "We are already working to correct the office furniture inventory concerns by first adding this procedure to our internal controls plan."
Auditor: "We believe that DOER’s intention to implement our recommendation on this matter is responsive to our concerns."