Audit Division
Audit Summary

Commission on Tourism
Division of Publications
Report LA96-22

Results in Brief

Over the past 2 fiscal years, the Division of Publications had $1 million in sales to the Division of Tourism. Although these sales represented about 30% of the Division of Publications' total revenue, no formal agreement was used to document terms such as the price and quantity of items sold. In addition, the Division of Publications had not developed complete cost information to ensure the price of the goods sold to the Division of Tourism was fair and appropriate.

Management of the Division of Publications has stated it operates as a self-supporting entity and expenditures are directly dependent upon the ability to generate revenue. However, without a full and accurate disclosure of the terms and costs of interdivisional transactions, there is no confirmation that the Division is generating the revenue necessary to be truly self-supporting.

Our review of the Division's controls over its contracts for services indicates the Division does have adequate controls over its contract award and payment processes.

Principal Findings

1. The Division of Publications did not have a formal written agreement to provide $1 million of publications to the Division of Tourism during fiscal years 1994 and 1995. These sales are crucial to the Division of Publications' financial stability because they make up almost 30% of its revenues. (page 8)

2. The Division does not maintain complete cost data to properly analyze pricing policies. Although some costs associated with producing the 1.2 million copies of Nevada Events sold to Tourism were estimated, advertising revenues were not considered. The price of 52,000 magazine subscriptions sold to the Division of Tourism during fiscal years 1994 and 1995 was not based on the cost of production. (page 11)