Secretary of the Commonwealth
January 5, 2017 · Read the full official report (PDF) ↗
Published January 5, 2017 Audit covers July 1, 2013 – June 30, 2015 Under Suzanne M. Bump · 2011–2023
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“Below is a summary of our findings and recommendations, with links to each page listed.”
Read the plain-English breakdown
This is a state performance audit of selected Secretary of the Commonwealth operations from July 1, 2013 through June 30, 2015.
“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, July 1, 2013 through June 30, 2015.”
The auditor reviewed whether the office had proper internal controls and followed applicable rules in the areas examined.
“The purpose of our audit was to review certain of SOC’s operations to determine whether it had established adequate internal controls and complied with applicable laws, rules, and regulations for the areas reviewed.”
Weak controls can make it easier for valuable public property, records, money, or equipment to be lost, stolen, misused, or misreported.
“As a result of these issues, these capital assets are at a higher risk of loss, theft, or misuse and may not be properly accounted for in MMARS.”
For residents, this affects public access to reliable state records, protection of historical items, and confidence that registry fees and public assets are handled correctly.
“SOC is the principal public information office for state government and is organized into 15 major divisions: the Executive Office, the Elections Division, the Corporations Division, the Securities Division, the Massachusetts Historical Commission, the Public Records Division, the Massachusetts Archives Division, the State Records Center, the Commonwealth Museum, the Citizen Information Service, the State Publications and Regulations Division, the State House Tours and Government Education Division, the Administrative Services Division, the Lobbyist Division, and the Registry of Deeds Division.”
The audit found three main problems: Archives inventory and security controls needed improvement, some Registry of Deeds cash duties were not properly separated, and fixed-asset inventories were not properly maintained.
“The six RODs we reviewed did not perform annual inventories or record all required inventory information, but SOC reported to OSC in 2014 and 2015 that annual physical inventories had been performed.”
The report recommends tighter inventories, better training and policies, stronger revenue review, and more oversight; the office said it hired an outside accounting firm to review Archives inventory controls.
“SOC management stated that they had secured the services of an independent accounting firm to conduct an audit of the inventory process at the Archives Division.”
This matters because the office handles major public information functions, state records, historical materials, and Registry of Deeds revenue across multiple divisions.
“The Secretary of the Commonwealth (SOC), an elected constitutional officer of the Commonwealth, was established in 1780 and is the principal public information officer for the state government, with direct control over 15 divisions.”
MMARS is the state’s accounting system; ROD means Registry of Deeds; SOC means Secretary of the Commonwealth; OSC means Office of the State Comptroller.
“MMARS Massachusetts Management Accounting and Reporting System”
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What the Auditor checked
- Complied Did the Corporations Division have a process in place to collect revenue for annual filling fees, and did it segregate duties related to the collection of revenue?
- Did not comply Does the Massachusetts Archives Division have adequate internal controls in place to account for, and properly safeguard, historical treasures under its care?
- Did not comply Are there adequate internal controls in place over the handling of revenue and the administration and safeguarding of capital fixed assets by Registries of Deeds (RODs)?
What the Auditor found
Why it matters: These assets are at higher risk of loss, theft, or misuse and may not be properly accounted for in MMARS.
Standard: Office of the State Comptroller and Operational Services Division fixed-asset policies requiring annual inventories and recording of works of art and historical treasures. ( Office of the State Comptroller Fixed Assets—Acquisition Policy dated November 1, 2006 )
3 recommendations
- SOC should establish and implement controls to ensure annual physical inventories, reconciliation to inventory records, proper identification and accounting for capital assets, MMARS recording of post-July 1, 2001 acquisitions or donations, and inventory records with acquisition or donation dates and historical costs or appraised values.agency: disagreed
- SOC and Archives Division management should implement procedures to comply with OSC’s Fixed Assets—Acquisition Policy, train staff on capital-asset requirements, and seek OSC guidance if needed.agency: disagreed
- Management should consider installing surveillance cameras in the vaults to reduce the risk that historical items are misplaced, lost, or stolen.agency: partially agreed
Agency response & Auditor reply
Agency: "The Massachusetts Archives maintains adequate controls in the management of its collections and provides the following detailed responses to findings contained in the . . . report."
Auditor: "Our audit findings and related conclusions are based on applicable inventory requirements established by both OSC and OSD that apply to the operation of SOC’s Archives Division; our audit testing, which was performed in accordance with generally accepted government auditing standards; and our discussions with OSC and SOC staff."
Why it matters: Revenue may not be properly recorded, deposited, reported, or classified, and errors may go undetected.
Standard: Office of the State Comptroller Internal Control Guide requirements for segregation of duties, supervisory approval, and reconciliation. ( Office of the State Comptroller Internal Control Guide )
3 recommendations
- SOC should work with RODs to develop and implement detailed revenue policies that define responsibilities and independent supervision for collecting, recording, depositing, reporting, and reconciling revenue.agency: disagreed
- SOC should ensure ROD supervisors review, document, and approve daily revenue reconciliations and deposit slips before bank deposits.agency: already implemented
- SOC should strengthen its internal control plan to require ASD’s MMARS revenue entries to be reviewed and reconciled.agency: disagreed
Agency response & Auditor reply
Agency: "The RODs, in accordance with the requirements of the [SOC] Internal Control Plan, have in place adequate and effective revenue collection procedures that provide for clear lines of duties, responsibilities and authority, as well as supervisory oversight and the segregation of duties."
Auditor: "Notwithstanding SOC’s understanding of the procedures that RODs should be following, for the RODs we visited, we determined that daily revenue review and reconciliation activities were not always carried out as described in SOC’s ICP and its response."
Why it matters: RODs cannot ensure assets are safeguarded against loss, theft, and misuse, and inaccurate ICQ reporting impairs OSC’s assessment of SOC’s internal controls.
Standard: Office of the State Comptroller Internal Control Guide, Fixed Assets—Acquisition Policy, and Office of the State Comptroller and Operational Services Division Fixed Assets—Accounting and Management Policy. ( Office of the State Comptroller Internal Control Guide; Office of the State Comptroller Fixed Assets—Acquisition Policy; Office of the State Comptroller and Operational Services Division Fixed Assets—Accounting and Management Policy )
3 recommendations
- SOC should ensure RODs perform, review, and document annual physical inventories and reconciliations of fixed assets against accounting records.agency: partially agreed
- SOC should provide more oversight and guidance to RODs on fixed-asset management and inventory controls, including written policies and procedures summarized in its ICP.agency: partially agreed
- SOC should accurately report annual physical inventory information on its ICQs.agency: partially agreed
Agency response & Auditor reply
Agency: "We do concur that there are certain inventory items that do not contain historical cost and acquisition dates."
Auditor: "SOC should ensure that RODs are compliant with OSC’s annual inventory guidelines."