Intrater, Michelle 7/15/97
Curative Rehabilitation Services
Intrater, Michelle 7/15/97
EDS Electronic Data Systems Corp.
Intrater, Michelle 7/15/97
Electric Power Co., Wisconsin
Intrater, Michelle 7/15/97
Labor Assn. of Wisconsin, Inc
Intrater, Michelle 7/15/97
Milwaukee Deputy Sheriffs Assn.
Intrater, Michelle 7/15/97
Milwaukee Metropolitan Sewerage District
Intrater, Michelle 7/15/97
Prosecutors, Assn. of State
Intrater, Michelle 7/15/97
Speech Language Hearing Assn. Inc Wisconsin
Intrater, Michelle 7/15/97
Waste Management of Wisconsin, Inc
Intrater, Michelle 7/15/97
Also available from the Wisconsin Ethics Board are reports identifying the amount and value of time state agencies have spent to affect legislative action and reports of expenditures for lobbying activities filed by the organizations that employ lobbyists.A
Sincerely,
R. Roth Judd
Executive Director
State of Wisconsin
Legislative Audit Bureau
July 14, 1997
The Honorable, The Legislature:
We have completed a financial and compliance audit of the State of Wisconsin as requested by state agencies to meet the audit requirements of the Single Audit Act of 1984 and provisions of the federal Office of Management and Budget Circular A-128. Our audit covers the period July 1, 1995 through June 30, 1996. In addition to satisfying audit requirements, the single audit assists us in meeting state audit requirements under section 13.94, Wis. Stats.
Report 97-11 contains the auditor's reports on internal control structure and compliance; findings of noncompliance with federal requirements and the results of our follow-up to prior audit findings; agencies' responses to our recommendations and their plans for corrective action; and the Schedules of Federal Financial Assistance and accompanying notes. We have identified $745,134 in questioned costs. However, it is unclear the amount the State may be required to repay the federal government and it is likely to be significantly less than the total costs we questioned.
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The largest single item of question cost relates to Unemployment Insurance benefit overpayments. Federal rules require that a state that made an overpayment to immediately repay any other states that helped finance the overpayment. Instead, Wisconsin makes repayment to other states only when the overpaid recipient repays Wisconsin. The questioned cost for this area of noncompliance is $381,386. This finding has been discussed in prior audit reports but has not been addressed by the federal government.
The next largest area of questioned costs relates to interest charges. The federal government has rules prohibiting states from claiming reimbursement for some types of interest charges. One rule is that it will not pay interest charges in financing buildings constructed prior to October 1, 1980. We questioned the $92,791 that the Department of Workforce Development claimed for such interest charges. We also questioned the $127,071 in interest costs the Department of Workforce Development charged the federal government relating to financing arrangements for internal service funds, such as the one providing computing services to state agencies. However, internal service fund interest charges did become allowable costs subsequent to our audit period.
In addition, we questioned $127, 164 in costs claimed by the Department of Commerce because it did not fully document payroll and related costs charged to federal and state matching accounts, as required by federal grant rules. Finally, we questioned $16,722 in costs for a variety of findings at various state agencies.
Although questioned costs were not at issue, we disagree with how the Department of Natural Resources accounts for some federally reimbursed costs. For certain federal programs, part of the reimbursed costs are charged to state general purpose revenue appropriations, while the reimbursement is credited to the account for federal programs. If both the reimbursement and the reimbursed costs were assigned to the federal program account, general purpose revenue could be available to be lapsed. This lapse would be on a one-time basis. The amount of potential lapse is not known, though our analysis of one large project suggested that the recommended treatment could have allowed the lapse of $220,211 in general purpose revenues during fiscal year 1995-96.
Our unqualified audit opinion on the State's financial statements was included in the Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996. This report was published by the Department of Administration in December 1996 and is available from the State Controller's Office in the Department of Administration.
Our single audit report is lengthy and detailed. We are, therefore, limiting our initial distribution of the report to those required by law to receive copies, the audited state agencies, and the federal agencies providing funding to the State. However, if you are interested in receiving a copy of the single audit report, please contact our office and request report number 97-11.
Sincerely,
Dale Cattanach
State Auditor
__________________
Relating to an increase in 1997-98 premium rates for the health insurance risk-sharing plan.
Submitted by Office of the Commissioner of Insurance.
Report received from Agency, July 15, 1997.
Referred to committee on Health, Human Services, Aging, Corrections, Veterans and Military Affairs,
July 17, 1997.
Relating to the administration of the forest crop law and the managed forest law.
Submitted by Department of Natural Resources.
Report received from Agency, July 16, 1997.
Referred to committee on Agriculture and Environmental Resources, July 17, 1997
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__________________
Senator Risser, with unanimous consent, asked that the Senate adjourn until Tuesday, July 22 at 10:00 A.M..
Adjourned.
10:01 A.M.
