Audit Division

Audit Summary


Department of Business and Industry

Financial Institutions Division


Report LA02-02

Results in Brief


        The Division’s financial management practices need improvement.  Revenues and expenditures were not always recorded to the proper account.  For example, fines totaling  $180,000 were not deposited to the state General Fund as required by law.  Other revenues and expenditures were also incorrectly recorded which caused errors in the amounts assessed against banks and other depository institutions.  We also noted problems with the collection of money, including delays in depositing money.  Finally, the Division has not adequately separated duties or reviewed employees’ work, which contributed to some of the problems noted in the report. 

Principal Findings


·            The Division incorrectly deposited fines to its investigative account instead of the state General Fund.  The Division collected about $180,000 in fines during fiscal years 1999, 2000, and the first two months of fiscal year 2001.  All fines collected during this time were deposited to the wrong account. (page 7)

·            The Division recorded expenditures to the investigative account that were not related to investigations.  Eighteen of the 24 expenditures that we tested from the investigative account for fiscal year 2000 should have been recorded to the Division’s operating account.  If the expenditures had been recorded in the operating account, they would have been included in the amount assessed against depository institutions.  As a result, the Division under assessed banks and other depository institutions by $10,500 in fiscal year 2000.  (page 8)

·            Over half (13 of 22) of the checks greater than $10,000 received by the Division in fiscal year 2000 were not deposited timely.  The longest delay was 8 days and the average delay was 5 days.  Audit reports issued in 1982 and 1986 also noted the Division was not depositing money timely.  (page 9)

·            The Division has not adequately separated duties related to revenues and expenditures since one employee performs all of the key duties.  In addition, there is minimal review of the work performed by the employee.  As a result, billing errors were not detected which resulted in the Division overcharging depository institutions about $30,000 in the last 2 fiscal years.  (page 10)








Department of Business and Industry

Financial Institutions Division


Agency Response

to Audit Recommendations




      Number                                                                                                                             Accepted     Rejected


            1               Record revenues and expenditures to the appropriate account.                         ___X__    ______


            2               Deposit money timely as required by NRS 353.250.                                         ___X__    ______


            3               Deposit money received in Las Vegas at a local bank.                                     ___X__    ______


            4               Separate key accounting duties among individuals to reduce the

                             risk of errors occurring and not being detected.                                              ___X__    ______


            5               Review employees’ work to reduce the risk of errors and to

                             ensure the agency’s written procedures are followed.                                      ___X__    ______


                             TOTALS                                                                                   ___5__    ___0__