The Legislative Audit Committee (LAC) met February 28 at the Capitol in Helena to review audit work presented by Legislative Audit Division staff and hear from audited agencies.
A performance audit of Tax Increment Financing (TIF) (17P-03) was presented. It provides information about the use, oversight, and impacts of TIF and includes recommendations for enhancing oversight and statutory clarification of the program. The committee also reviewed an Information Systems audit on Governance Practices for Information Technology Investments (17DP-02) including information about the processes that govern IT spending for the state from the point of selection high priority investment and requesting funding to evaluating the investment through its life cycle. The report includes recommendations for enhancing investment processes and coordinating them thorough an overall framework at the State Information Technology Services Division.
The Public Employees’ Retirement Board (16-08B) received an unmodified opinion from the auditors, meaning the reader can rely on the information presented. However, the report also indicates that the actuarial valuations of the Game Wardens’ and Peace Officers’ and the Highway Patrol Officers’ retirement systems are not actuarially sound, a conflict with the Montana Constitution. The Teachers’ Retirement Board report (16-09B) includes no recommendations and received an unmodified opinion from the auditors, meaning the reader can rely on the information presented.
The Montana Board of Investments(BOI) (16-04B) audit report includes a recommendation related to internal controls for financial reporting. Audit work identified errors in the presentation and disclosure of information in the Unified Investment Program including a $1.7 billion misclassification of assets between cash equivalents and investments, a $326.1 million overstatement of participant purchase and sale activity, and a $326.3 million overstatement of realized gains. In addition, errors in the Enterprise Fund Program financial statements included a misclassification of cash flows and incomplete note disclosures associated with a $8.5 million bond anticipation note.
There was a follow-up report regarding the implementation of six recommendations in a performance audit of School Data Collection Systems and Processes (18SP-01) indicating the Office of Public Instruction has partially implemented three, and is in the process of implementing three of recommendations made related to mitigating and assessing the risks related to student data privacy.
Two financial and compliance reports, Montana Guaranteed Student Loan Program (17-06) and Board of Housing (17-07A), include no recommendations and received an unmodified opinion from the auditors, meaning the reader can rely on the information presented. The LAC also reviewed a contract audit of the Montana Legislative Branch (17C-11) and the Montana Consumer Counsel (17C-11-consumer), neither included recommendations.
A financial and compliance audit of the State of Montana (17-01A) was presented. The report contains financial statements summarizing all state financial activity, including the university system and its foundations. The report summarizes the state’s resources and obligations, and includes a wealth of information on important financial topics, such as investments, long-term debt, financial commitments, and significant events impacting the state’s financial status. The report also contains a detailed schedule of the state’s federal grant activity.
The Legislative Audit Committee ensures accountability for the disposition and use of public funds, and the efficient and effective management of state government programs. The committee meets regularly to review reports, hear from audited agencies, and advise and consult with the Legislative Auditor and the staff of the LAD. Senate Members of the LAC are Dee Brown (Secretary), R-Hungry Horse; Terry Gauthier, R-Helena; Bob Keenan R-Bigfork; Margaret MacDonald, D-Billings; Mary McNally (Chair), D-Billings; and Gene Vuckovich, D-Anaconda. House members are Kim Abbott, D-Helena; Dan Bartel, R-Lewistown; Randy Brodehl, R-Kalispell; Tom Burnett, R-Bozeman; Virgina Court; D-Billings; and Denise Hayman, D-Bozeman.
Copies of the reports can be accessed by clicking the alphanumeric identifier after each audit’s title or at the Legislative Audit Division website. The meeting was recorded and can be found and reviewed in the Legislature's video and audio archives.