These are discussed in the findings and recommendations section and relate to allocating internal overhead costs on a fair and equitable basis to administrative and Federal programs, accurate financial reporting of year end information to the State Controller's Office, and improving internal accounting procedures over timely deposits and timely invoice payment. We have summarized the findings and recommendations as follows. The recommendations are made to assist management in fulfilling its responsibility to establish and maintain adequate internal controls. These costs are charged to other programs based on the appropriations for those programs. Internal cost allocations should be fair and equitable.
Accurate allocations result in more accurate accounting and reporting of program costs.
We recommend the Division allocate overhead costs to all programs using a reasonable proportionate basis. The transition from a cash basis statement to statewide annual financial statements, in accordance with generally-accepted government accounting standards, has been difficult for all agencies. As a result, certain accruals, such as accounts receivable and deferred revenues, have been overlooked by many agencies, including the Division of Building Safety. We recommend the administrative personnel review closing package criteria and accurately report the required information to the State Controller's Office. Assistance can be obtained from the State Controller's Office.