Office of the State Treasurer and Receiver General

This is a performance audit of the Massachusetts Office of the State Treasurer and Receiver General covering July 1, 2014 through January 19, 2015.

“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, July 1, 2014 through January 19, 2015.”

The State Auditor reviewed the Treasurer's office because a new Treasurer had taken office and the audit was meant to show the status of important financial and administrative operations during the transition.

“The purposes of our audit were to inform the new State Treasurer and Receiver General of the status of certain fiscal and administrative operations as of the date she assumed office, to enhance the transition from the prior administration, and to identify any internal controls needing improvement or noncompliance with laws or regulations that needed to be addressed and resolved in the areas reviewed.”

These issues matter because weak controls can lead to misstated records, missed reporting, delayed oversight, and public money being handled without current required information.

“If processes to enable personnel to understand and carry out their responsibilities are not clearly defined and in place, then any matters of significance relating to internal control, including instances of internal control weakness and noncompliance, may go unreported and eliminate the opportunity for management to identify and address the cause and take timely corrective action.”

The Auditor found that the Treasurer's office had some controls in place, but it also failed to fully follow rules for fixed assets, bank reconciliation, reporting missing property, and sending the Governor the required bank list.

“Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.”

The report recommends that the Treasurer's office improve inventories, reconciliations, missing-property reporting, internal control policies, and the required bank-list process.

“OST should establish written policies and procedures to ensure that a list of qualified banks is provided to the Governor at least once every six months.”

The biggest significance is that the audit pointed to gaps in oversight: missing property was not immediately reported, assets were not fully reconciled, and some legally required information was not sent on time.

“Not reporting variances, losses, shortages, or thefts of funds or property immediately to OSA can prevent or delay an independent assessment and recommendations regarding potential internal control weaknesses that may have contributed to or caused the problem.”

Fixed assets are things the office owns, such as vehicles, equipment, furniture, software, and computer parts; MMARS is the state's accounting system; internal controls are the policies and checks meant to prevent mistakes, losses, and noncompliance.

“Vehicles, equipment, furniture, computer software, and all electrical and computer components with (1) a useful life of more than one year and (2) with an original cost between $1,000 and $49,999.”