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State auditor
By Mary Adamski
faults DLNR
fiscal practices
Star-Bulletin
Historic preservation and other programs run by the state Department of Land and Natural Resources qualify for federal funds but the state auditor found lags in fiscal practices that mean federal resources are not "maximized."
The practice of crediting such grants to the following year's general fund expenditures "allows the department to exceed its authorized appropriation ceiling approved by the Legislature," said auditor Marion Higa in a report yesterday.
Higa recommended that the department seek legislative authorization to spend federal funds credited to its general fund. Timeliness was also a factor in its recommendation that the agency tighten up controls on renewing land lease agreements to implement higher rents and monitoring lessees' compliance with requirements for bonding and insurance.
The report also found deficiencies in how the Division of Boating and Ocean Recreation collected mooring fees and its other internal accounting controls.
Higa said the department failed to meet a federal requirement for submission of its audited financial statements, filing the statement for the 1997-98 fiscal year eight months after it was due.
The audit was conducted by Higa's office and PricewaterhouseCoopers LLP for the fiscal year July 1998 through June 1999. The Department of Land and Natural Resources received more than $50 million in state, federal, special and capital improvement project funds in that period.
"The department must ensure accountability over these funds given the significant amounts received," said Higa's report. "However, the department failed to follow federal and state law and accepted accounting practices in fulfilling its financial responsibilities."
The department also recorded a June 30 receivable of $487,000 for federal grant reimbursements for the previous fiscal year.
"This crediting of a subsequent year's expenditure enables the department to spend its appropriation ceiling plus the additional $487,000 during FY 1999-2000," the report said.
Department Director Timothy Johns said the auditor's report "focused on specific instances where the department erred in its accounting. However, none of the examples warrant the sweeping conclusions that were made."
He pointed out that some of the problem occurs because the federal fiscal cycle differs from the state's. He said 12 of the agency's 19 programs received federal funding most of which are reimbursable annual grants.
"This means that the department has to spend state funds before it can apply to receive any federal monies back," Johns said. He said his department is not the only one facing that situation.
Johns said he agrees with some of the audit findings, "in particular we understand improvements must be made in the revenue and receivables computer system of the Division of Boating and Ocean Recreation.
"DLNR is in the strongest fiscal accounting position it has enjoyed for many years. The two operating divisions that have faced the most difficult financial problems in the past, the Bureau of Conveyances and the Land Division, have both made remarkable progress over the past year to computerize their accounting functions and remedy past fiscal problems."
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