As a result, it allowed contracts to lapse and contract maximums to be exceeded. When contracts are not managed effectively, the State may assume unexpected or inappropriate obligations. The State Risk Manager should protect the State from potential liability from personal service contracts. Contract provisions are intended to protect the State from assuming obligations in excess of its resources or in violation of state statutes. We recommend the Division ensure that its contracts for outside services are effectively managed by establishing policies and procedures for developing and monitoring the contracts.
Procedures are now in place to ensure that outside contracts are managed effectively.
The Department of Administration prepared financial statements for the Division that did not provide readers with the most accurate and consistent information possible. As a result, users of the statements may not have the necessary information to compare the Division's activities and condition between fiscal years properly. An adequate system of internal controls including an ongoing review and supervision by management could have prevented many of the errors. In addition, staff assigned to the preparation of the statements should prepare them in accordance with governmental accounting standards. We recommend General Support Services ensure the Division's financial statements are complete and accurate.