Audit Division

Audit Summary

Department of Museums, Library and Arts

State Council on the Arts

Report LA98-1

Results in Brief

Although the State Council on the Arts has some controls over the grant process, it has not established written procedures that address monitoring, accounting, and reporting of grant activity. As a result, the Council's procedures do not ensure compliance with state and federal requirements. In addition, the Agency inconsistently recorded operating and grant transactions, and failed to document that key elements of the grant process took place. Because of these weaknesses, the Council could benefit by requesting assistance from the Office of Financial Management, Training and Controls.

Principal Findings

1. The Council has not developed written accounting procedures or allocation methods to ensure the proper recording of grant transactions, nor does it maintain documentation supporting the allocations made. We found administrative expenditures were inconsistently recorded in operating and grant categories, while payments to grantees were often commingled with other unrelated grantees. (page 9)

2. Charging administrative expenses to various categories avoids procedures established for revising agency work programs when state budgeted monies are exhausted. For instance, if the Council had not allocated certain travel and telephone costs, it would have over expended the travel and operating allotments as approved by the Legislature. (page 10)

3. The Council does not maintain documentation supporting its federal reimbursement calculations. The Council also has not developed written procedures to ensure the accurate and consistent calculation of cost reimbursements and the preparation of federal reports. As a result, we were unable to verify the accuracy of expenditures reported on the federal reports. (page 10)

4. Most of the 15 grants we examined did not have evidence of periodic monitoring of grantee progress or compliance with financial requirements. (page 11)

5. The Council does not always review grantee draw-down requests. Six of 15 grantee draw-down requests did not have evidence of the Council's review. In one case, the Council mistakenly paid $300 more than the authorized award amount. (page 12)