Audit Division

Audit Summary

 

Department of Business and Industry

Office of Labor Commissioner

Report LA02-04

 

Results in Brief

 

††††††††† Although the information system does assist the Labor Commissioner with certain wage claim and public works duties, the system falls short of expectations.In our prior audit we recommended the Office determine its information needs and develop a system using simple computer software and minimal staff time. However, the Office chose to develop a complex system which has been in various stages of development since fiscal year 1996.Furthermore, processing errors and insufficient reporting capabilities limit its usefulness.For instance, the system did not calculate prevailing wages correctly.As a result, some workers on public works projects were paid the incorrect hourly wage.In addition, the Office has developed additional procedures and reports to compensate for the systemís inability to provide reliable information.Poor communications between the Office and the Department of Information Technology (DoIT) contributed to the systemís shortcomings.However, since August 1999 when the current Labor Commissioner was appointed, the Office has been working to resolve these long-standing problems.

Principal Findings

 

       In 1994, we reported the Office of Labor Commissioner did not have an adequate management information system.The lack of such a system contributed to the Office reporting inaccurate in-formation to the Legislature during the 1993 session.Instead of establishing a system with minimal resources, the Office chose to have the Department of Information Technology (DoIT) develop a complex and costly system.(page 6)

       None of the systemís four components were completed on time. For example, the public works monitoring software was installed more than 2 years after the estimated completion date.As a result, the Office could not provide the 1997 and 1999 Legislatures with system generated data related to its activities.(page 7)

       Although system expenditures totaled nearly $300,000 as of June 30, 2000, not all costs have been included.For example, the Office did not pay DoIT for billings totaling more than $11,000 in fiscal year 1998.In addition, DoIT did not bill the Office for all programming costs since the system was not completed on time.(page 7)

       Because of insufficient testing procedures, the Office did not detect programming errors in the prevailing wage component of the system.As a result, the hourly wage rate for some work classifications was not correct.Incorrect prevailing wage rates affect workers pay and project costs.(page 9)

       Although the public works component produces 10 reports, 4 do not contain data and 6 contain inaccurate data.As a result, key performance and project information must be tracked manually.†††† (page 11)

       Financial reports generated by the systemís wage claim component are incomplete.Key financial information, such as deposit and check dates, are not reported.As a result, the monthly bank reconciliation process requires additional staff resources to ensure all activity is properly accounted for.(page 12)

       Although poor communication contributed to the systemís shortcomings, the current Labor Commissioner has addressed this problem.Shortly after his appointment, he informed DoIT that improved communication was needed for the system to be successful.As a result, the Office has signed an agreement with DoIT for additional system modifications.(page 13)

 

Agency Response

to Audit Recommendations

 

 

Recommendation

††††† Number†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Accepted†††† Rejected

 

††††††††††† 1†††††††††††††† Ensure all systems are thoroughly tested prior to acceptance.†††††††††††††       X     ††††             

 

††††††††††† 2†††††††††††††† Ensure system expectations are properly communicated to

†††††††††††††††††††††††††††† programmers.††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††          ††           

 

††††††††††† 3†††††††††††††† Reassess the Officeís information needs and the systemís ability

†††††††††††††††††††††††††††† to meet those needs.If modifications are deemed necessary,

†††††††††††††††††††††††††††† ensure the additional costs are justified.†††††††††††††††††††††††††††††††††††††††††††††           ††††             

 

†††††††††††††††††††††††††††† †††† TOTALS††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       3     ††††       0