State of New Hampshire, Office of State Planning report on examination for the year ended June 30, 1983

[From the U.S. Government Printing Office, www.gpo.gov]

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STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

REPORT ON EXAMINATION
FOR THE YEAR ENDED JUNE 30, 1983

U S DEPARTMENT OF COMMERCE NOAA
COASTAL SERVICES CENTER
2234 SOUTH HOBSON AVENUE
CHARL.ESTON, SC 29405-2413

rA'N

I b

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

INDEX

Page

TNTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . ... . ... . 1
SUMMARY OF AUDIT RECOMMENDATIONS . . . . . . . . . . . . . . .... . . . . 2

AUDITOR'S OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

CONDENSED STATE14ENT OF GENERAL AND SPECIAL FUNDS APPROPRIATIONS
OPERATIONS FOR THE YEAR ENDED JUNE 30, 1983 . . . . . . . . . . . . . 5

FINAL STATEMENT OF'REVENUE AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS OF SEPTEMBER 30, 1982 . . . . . . . . . . . . . . . . . 6

FINAL STATEMENT OF REV ENUE AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS OF JUNE 30, 1983 . . . . . . . . . ... . . . . . . . . . . 7

FINAL STATE14ENT OF REVENUE'AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS OF SEPTEMBER 30, 1983 . . . . . . . . . . . . . . . . . . . 8

NOTES TO THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . 9

SCHEDULES OF FEDERAL GRANT ACTIVITY FOR THE YEAR ENDED
JUNE 30, 1983 (SCHEDULE A) . . . . . . . . . . . . . . . . . . . . .. 11

REPORT ON INTERNAL ACCOUNTING CONTROL . . . . . . . . . . . . . . . . . 14

REPORT OF FEDERAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . 18

AUDITEE RESPONSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

INTRODUCTION

The Office of State Planning, originally a division of the Department of
Resources and Economic Development, was transferred to the Office of the
Governor in 1970. The Office is primarily responsible for:

� Planning for the orderly development of the resources
of the state.

� Planning information and research services as necessary
to advance the welfare of the state.

� To encourage planning by cities and towns or regions.

� To encourage the extension and correlation of state
planning by other state agencies.

� To participate in interstate, regional and national
planning efforts.

The Office is comprised of a Director, seventeen planners and eleven support
personnel. They were responsible for the administration of fifteen federal
grants during the fiscal year ended June 30, 1983. During that period $1.2
million of operations were funded by approximately 70% federal funds and 30%
state funds..

Our previous examination for fiscal year 1982 revealed the following defi-
ciencies; non-reconciliation of agency ledger to the Comptroller's statement
and no fiscal year 1981 - 1982 biennial physical equipment inventory. Both of
these problems have since been corrected. Our current observations and rec-
ommendations are contained within the following report.

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

SUMMARY OF AUDIT RECOMMENDATIONS

AUDITOR'S OPINION
Auditor's opinion was.unquali -f"ied and there were no questioned costs
resulting in no recommendations pertaining to the financial statements

INTERNAL CONTROL

* Control summaries covering the entire grant period should be maintained for
each federal grant administered by the Office of State Planning.

* Transactions should be posted to th e federal grant ledgers in the year in
which they occur and all activity should be clearly identified.

e Efforts to automate the federal grant.s ledger should be'a top priority at
the Office of State Planning as a means of reducing the time consuming
nature of the manual ledger.

Allocations of budgeted hours to individual grants sho uld be'compared to
actual hours on a quarterly basis in order to identify necessary
adjustments on a timely basis.

Federal grants should be accounted for in separate division codes in order
to reduce the-manual adjustments necessary to track individual grant
revenues and expenditures.

As a matter of procedure, the Business Administrator should be notifi e'd
immediately of any changes regarding the status of federal grants.

COMPLIANCE

0 Contracts with subgrantees involving construction projects should include
appropriately worded clauses regarding reporting requirements and any
waivers of contract requirements should be in writing.

-2-

STATE OF NEW HAMPSHIRE

OFFICE OF LEGISLATIVE BUDGET ASSISTANT

STATE HOUSE
HENRY F. GOODE CONCORD, NEW HAMPSHIRE 03301 GUY D. CHAPDELAINE. CPA
Legislative Budget Assistant Director of Audits
(603) 271-2785
CHARLES L. CONNOR
Deputy Legislative Budget Assistant

AUDITOR'S OPINION

TO THE FISCAL COMMITTEE OF THE GENERAL COURT:

We have examined the CONDENSED STATEMENT OF GENERAL AND SPECIAL FUND A?PRO-
PRIATION OPERATIONS of the Office of State Planning for the year ended June 30,
1983 and the FINAL STATEMENTS OF REVENUE-AND EXPENDITURES FOR FEDERAL GRANTS as
follows:

NUMBER GRANT GRANT PERIOD

NH-81-FAB Comprehensive Living Marine Resources 12/01/81 - 09/30/82
EMB-K-0183 Federal Emergency Management Agency 11 09/15/81 - 09/30/82
NH-A-1297 Rural Development Strategy 08/01/81 - 09/30/82
NA-80-AA-
D-CZ050 Coastal Zone Management 06/01/80 - 09/30/82
NA-82-AA-
D-CZ022 Coastal Zone Management 01/01/82 - 06/30/83
NA-82-AA-
D-CZ046 Coastal Zone Management 09/01/82 - 06/30/83
01-6-
02281-40 Economic Development Administration 03/01/80 - 06/30/83
NH-09-8007 Urban Mass Transportation Admin. 07/01/82 - 09/30/83
EMB-K-0086 Federal Emergency Mgt Agency 111 10/01/82 - 09/30/83
EMB-K-0103 Federal Emergency Mgt Agency IV 10/01/82 - 09/30/83
NA-83-AA-
D-CZO1l Coastal Zone Management 01/01/83 - 09/30/83
NA-80-AA-
D-CZ047 Coastal Zone Management 03/01/80 - 09/30/83

Our examination was made in accordance with generally accepted auditing stan-
dards and accordingly, included such tests of the accounting records and other
auditing procedures as we considered necessary in the circumstances.

As discussed in NOTE 1, the financial statements are not intended to present
the financial position of the Office of State Planning.

-3-

In our opinion, except for the matter referred to in the second paragraph, the
aforementioned financial statements present fairly certain financial activity
of the Office-of State Planning, in conformity with generally accepted account-
ing principles.

Our examination was made for the purpose of forming an opinion on the CONDENSED
STATEMENT OF GENERAL AND SPECIAL FUNDS APPROPRIATIONS OPERATIONS and the FINAL
STATEMENT OF REVENUE AND EXPENDITURES FOR FEDERAL GRANTS listed in the first
paragraph." The Schedule of State Programs and Federal Grants for the year
ended June 30, 1983 on pages 11 through I '3 is presented' for the purpose of
additional analysis. The information in this schedule has been subjected to
the auditing procedures applied in the examination of the CONDENSED STATEMENTS
OF GENERAL AND SPECIAL FUNDS APPROPRIATION OPERATIONS and in our opinion,
except for'the matter discussed in NOTE 1, such information is fairly stated in
all material respects in relation to the basic financial statements.

ICE THE SLATIVE BUDG ASSISTANT

January 6, 1984

-4-
/@(4@SLATIVE @BUD

STATE OF NEW RAMPSHIRE
OFFICE OF STATE PLANNING

CONDEMD STATEI-IENTS OF GE24ERAL AND SPECIAL FUND APPROPRIATION OPERATIONS
FOR THE YEAR ENDED JUNE-30, 1983

General Special Combined
Fund Fund CMemo Only)

Balance July 1, 1982 $ 14,752 $ 88,202 $ 102,954

REVENUES:

Appropriations -0- 19464,916 1,4649916
Less: Ancicipated Revenues -0- (1,101,933) (1,101,833).
Net Appropriations - 0- 363,033 363,083

Actual Restricted Revenue Received- -0- 842,893 842,893
Transfers -0- 37,500) 37,500)

Funds Available for Expenditure 14,752 19256,678 1,271,430

EXPE\DITURES:

Salaries & Benefits -0- 508,140 508,140
Current Expenses & Equipmenc -0- 75,954 75,954
Travel -O_ 9,837 9,837
Contract Payment -0- 138,499 138,499
Indirect Cost -0- 21,390 21,390
Other 23,001 403,367 426,368
Total Expenditures 23,001 1,157,187 1,180,188

Less:

Funds Lapsed to General Fund 54) 93,683) 93,737)
Unliquidated Encumbrances 1,253) 361,574) 362,B27)

Available Balance June 30, 1983 S( 9,556) 355,766) S( 365,322)
(Schedule A)

The accompanying notes are an intergal part of the financial statements.

-5-

STATE OF NEW HAHVSHIRE
OFFICE OF STATE PLANNING

FINAL STATEMENT OF REVENUE AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS OF SEPTERBER 30, 1982

Federal Emergency Department 6f
Administration Agriculture DpliartmPni-
FW 11 RDS NA-80-AA
EMB-K-0183 NH-A-1297 D-CZ050

TOTAL AWARDS

Federal $ 100,000 39,460 $ 59,361
state 3.822 18,732 21,361
Local -0-- -0- .4,080
103,822 57,192 84,802
Less: Accumulated Expenditures
to June 30'. 1982 82,452 39,912 fil - OAO

Available Balance at July 1. 1992 21,370 17,280 21,762

FISCAL YEAR 1983 EXPENDITURES:

Salaries & Benefits 12,654 15,662 8,332
Current Expenses & Equipment 1,942 909 747
Travel 891 130 86
Contract Payments -0- -0- -0-
Indirect Cost 4,974 -0- -0-
Other 909 579 4,906
Local Expenditures -0-- -0- 329

Total Expenditures 21,370 17,280 14,400

Available Balance at June 30, 1983 -0- -0- 7,362

Less- Final Costs incurred In
Fiscal Year 1984 -0- -0- -0-
Ending Balance -0- -0- 7,31,2'

Less: Award Balance ].speed to
Federal Agency -0- 5,152

Balance -0- -0- @2210

Federal Participation Level 100% 75% 70%

The aCCDMpanying notes are an Integral part of the financial statements.

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

FINAL STATEMEN'r OF REVENUE AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS 0)-- JUNE 30, 1983

Economic De
Department Of Commerce Administ
NA-82-AA NA-82-AA 01-
D-CZ022 D-CZ046 02287

TOTAL AWARDS
Federal $ 100,000 20,000 $ 154
State -0- -0- 53
Local -0- -0- 3
100,000 20,000 211
Less: Accumulated Expenditures
to June 30, 1982 -0- -0- 20
Available Balance at July 1, 1982 100,000 20,000

FISCAL YEAR 1983 EXPENDITURES:
Salaries & Benefits -0- -0-
Current Expenses & EquIpment -0- -0-
Travel -0- -0-
___---Contract Payments .-0- -0-
Indirect Cost -0- -0-
Other 68,562 -0-
Local Expenditures -0- -0-
Total Expenditures 68,562 -0-
Available Balance at June 30, 1983 31p438 20,000

Less: Final Coats Incurred In
Fiscal Year 1984 29,165 20,00
Ending Balance 2,273 -0-

Less: Award Balance Lapsed to
Federal Agency 2,273 -0-
Balance -0- C -0-

Federal Participation Level 100% 100%

The accompanying notes are an Integral part of the financial statements.

-7-

STATE OF NEW HA14PSHIRE
OFFICE OF STATE PLANNING

FINAL STATEMENT OF RFVENUE AND EXPENDITURES FOR FEDERAL GRANTS
ENDED AS OF SEPTEMBER 30. 1983

Department of Department of Federal Emergency
Commerce Transportation Management AdminiRtration
NA-93-AA NH-09 EMB EMB
D-CZOII 8007 K-0086 K-0103

TOTAL AWARDS

Federal $ 32,125 $ 25,000 $ 40,000 43,000
State -0- 6,250 -0- 14,333
Local -0- -0- -0-
32,125 31,2TO 40.000 57,333
Less: Accumulated Expenditures
to June 30, 1982 -0- -0- __O_ -0-
Available Balance at July-1, 1982 32,125 31,250 40,000 57,333

FISCAL YEAR 1983 EXPENDITURES-

Salaries & Benefits -0- 17,837 23,787 13,454
Current Expenses & Equipment -0- 1,776 3,869 774
Travel -0- 69 793 200
--Contract Payments- ._0_ -0- -0- -0-
Indirect Cost -0- 500 1,414 1,518
Other 28,925 4,060 100 5,922
Local Expenditures -0- -0- -0- -0-
Total Expenditures 28,925 24,@42 29,963 21,868
Available Balance at June 30, 1983 3,200 7,008 10,037 35,465

Less: Final Costs Incurred in
Fiscal Year 1984 1,185 7.Od8 10 19,238
Ending Balance 2,015 -0- 10,027 16,227
Less: Award Balance Lapsed to
Federal Agency 2,015 -0- in (171 12,170
Balance -0- $ -0- $ -0- 4,057

Federn] Participation Level 100% 80% 1002 75%

The accompanying notes are'an integral part of the financial statements.

-8-

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1983

NOTE 1 BAI IS OF ACC OUNTING

The financial activity of the Office of State Planning is accounted for in the
General and Special Funds of the New Hampshire Annual Report * The accompanying
report represents certain financial activities in such funds and is not intend-
ed to show the financial position of the Office of State Planning.

Expenditures by State Planning are limited by Statute to appropriations by the
General Court and the Governor and Council. The State of New Hampshire ac-
counts for its financial transactions on'a modified accrual basis of accounting
under which revenues are recognized in the accounting period in which they
become available and measurable and expenditures are recognized in the period
in which the obligations are incurred.

MAJOR FUNDS

General Fund

The General Fund accounts for all financial transactions not specifically
accounted for in any other fund. By law, all revenues received are paid into
the State Treasury. All such revenues, , other than the designated revenues
described below, are credited to the General Fund and the annual expenditures
for all State activities and functions not allocated by law to other funds are
charged to the General Fund.

Special Fund

The State allocates to the Special Fund expenditures for and revenues of
programs which, by statute, operate primarily from specific program revenues or
from federal grants in aid. The unexpended balance of appropriation of pro-
grams which lapse, is transferred to the General Fund,

NOTE 2 -- LEASES

The Office of State Planning leases space at 231 Beacon Street at an annual rate
of $25,500. It is a 3 year lease expiring on March 31, 1985. The lease is
subject to continuing appropriation by the General Court and may therefore be
terminated.without penalty if funds are not appropriated.

-9-

NOTE 3 LAPSES

The lapsed fund balance is inclusive of the 4% General expenditure lapse per
Executive Order 81-1 of $1,792 and the combined 10% and 5% Personnel lapse per
Chapter Laws 42:108 and 193 1982SS respectively of $36,248.

NOTE 4 -- AVAILABLE BALANCE

The available fund balance which is brought forward between fiscal years, is
the excess of the total appropriations, revenues and transfers over the total
of expenditures, encumbrances and lapses. Only certain funds which are re-
stricted in their use by state or federal statute may be brought forward.
Examples-of such funds are the State's Special and Capital Funds (NOTE 1)

The negative Special Fund balance of $355,764 consists of obligated federal
funds which have been encumbered and for which the State will be reimbursed
upon expenditure of the funds. The available General Fund balance of negative
$9,556 is net balance of a prior years uncollectible accounts receivable. The
Agency is awaiting authority from the Legislature to write-off the amount.

NOTE 5 -- OTHER MATCHES

Any matches that originate from sources other than appropriations budgeted to
the Office of State Planning are not reflected in Schedule A - Schedule of
State Programs and Federal Funds. Federal grants are reported on in their
entirety only upon final close-out of the award and not on an interim basis.

_10-

STATE OF NEW HAMPSHIRE
OFFICE OF STATE PLANNING

SEMPAHILE OF STATE PROGRAMS AND FEDERAL GRANTS
FOR THE YFAR' ENDED JITNE 30. 1983

ECONOMIC DEVELOPMENT ADMINISTRATION FEDERAL EMERGENCY MANACEKENT ADMINISTRATION
01-25 01-6 EMB EMB EMB
013354-50 02287-40 K-0183 K-0086 K-0103

REVENUES:

Federal Grant $ 39,730 $ ._O_ $ 17,548 29,953 $ 16,604
State Appropriation 13,245 -0- -0- -0- 8,052
Total Revenue 52,975 -0- 17,548 29,953 24,656

EXPENDITURM

Salaries & Benefits 41,537 -O_ 12,654 23,787 13,454
Current Expenses 5,883 -0- 1.942 3,869 774
Travel 514 -0- 891 793 200
Contract Payments -Cf- -0- _0_' -0- -0-
Indirect Costs 1,280 -0- 4.974 1,414 1,518
Other - 99 4,800 909 100 5,922
Total Expenditures -49.313 4.800 21,370 29,963 21,868

Excess Revenue Over (Under) Expenses 3,662 ( 4.800) ( 3,822) 10) 2,788

interfund Transfers -0- -0- -0- -0- -0-

Excess Balance 3,662 ( 4,800) ( 3,822) 10) 2,788

Fund Balance Beginning of Year -0- 4,800 16 -0- -0-

Fund Balance End of Year 3,662 -0- ( 3.806) 10) 2,768

Less:

Unliquidated Encumbrances 1,256 -0- -0- 9 14,523
Funds Lapsed to General Fund Surplus 602 -0- -0- -0- -0-

Available Balance, June 30, 1983 1@804 -0- 3,806) 1 11.73 5)

Total Federal Award 39,730 154.602 50,000 40,000 43,000
State Participation Level 25% 252 02 0% 252

STATE OF NEW HAMPSHIRE S
OFFICE OF STATE PLANNING

SCHEDULE, OF sTATL PROGRAMS AND FEDr.RAL GRANTS
rOR THE YEAR ENDED JUNE 30, 1983

DEPARTMENT OF COMMERCE
NA-83-AA NA-82-AA NA-82-AA NA-80-AA NA-82-AA NA-80-AA
D-CZ011 D-CZ022 D-CZ037 D-CZ047 D-CZ048 D-CZ050

REVENUES:

Federal Giant $ 28,925 $ 60,241 276,877 $ 195,915 $ 41,0[1 $ 11,784
State Appropriation -0- - -0- 30,175 3,999 6,498 5,778
Total Revenue 28, 9F5 60.241 307,052 199,913 47,509 17,562

EXPENDITURES:

Salaries & Benefits -0- -0- 86,709 28,913 7,195 8,332
Current Expenses -0- -0- 19,576 6,110 1,695 747
Travel -0- -0- 2,iOZ 1,177 116 86
--Xon t rac t Paymen t B -0- 68.562 -0- .!45,295 -0- -0-
Indirect Costs -0- -0- 4,609 i,220 500 -0-
Other 28,925 -0- 204,714 104,594 34,331 4.906
Total Expenditures 28,925 68,562 317,710 1B8,309 43,837 14,071

Excess Revenue over (under)
Expenses -0- 8,321) 10,658) 11,604 3,672 3,491

Interfund Transfers -0-- -0- -0-- --0- -0-

Excess Balance -0- 8,321) 10.658) 11,604 3,672 3,491

Fund Balance -- Beginning
of Year -0-- -0- -0- 93) -0- 4,004

Fund Balance -- End of Year -0- 8,321) 10,658) 11,521 3,672 7,495

Less:

Unliquidated Encumbrances -0- 31,438 235,333 5,637 45,581 -0-
Funds Lapsed to General
Fund Surplus -0-- -0- 1,792 1,493 -0- 1,556

Available Balance,
June 30, 1983 $ -0- @759 $( 247,783 $ 4,391 $( 41,909 $___5.,') 3 9

Total Federal Award $ 28.925 100. Ono 600,000 $ 881,398 $ 44,675 59,361
State Participation Level 01 0% 2 0% 0% 0% 30%
195.000
20%

-12-

sTATE OF NEW 11AMPSHTRE
_-@HEDULE A
()I;FrCE OF STATE PLANNING

SCHE.MfIX OF SIATE PRoCRAMS ANI) FEDERAL CRAN,rs
FOP 1111; YEAR ENDLD JUNE 30, 1983

Housing, & Urban National Park Dept of Trans- Dej,t of Stat
Development Service portation Agriculture Propra
B-82-SK-33-0 33-01)9-1 NII-09-8007 Nil-A-1297

REVENUES:
Federal Crant 42,702 $ 31,577 $ 19,4 4 3 8,526 $ 3,
State Appropriation -0- 37,038 5,350 2,844 2292
Total Revenue 42,702 68,615 24,793 11,370 232,

EXPENDITURES:
Salaries & Benefits 34,863 51,286 17,837 15,642 132,
Current Expenses 4 , 3Z 3 7,091 1,776 909 17,
Travel 809 748 69 130 1,
.---,Contract Payments -()- - _ _. . . .- -0- -0- -0-
Indirect Costs 2,000 1,800 500 -0
Other 422 9143 4,060 579 29,
Totnl Expenditures 42,417 61,868 24,242 17,280 205

Excess Revenue nver (11nder)
Expenses 285 6,747 551 5,910) 27
Interfund Transfers -0- - -0- -0- -0- ( 37
Excess.Balance 295 6,747 551 5,910) ( 10
Fund Balance Beginning of Year -0- - -0- @0@ 2,131 83
Fund Balance Fnd of Year 285 6,747 551 3,779) 73

Less:
Unligitidated Encumbrances 1,h6l 3,502 769 -0- 2
Funds Lapsed to Geiieral Fund Surplus -0- 4,353 347 82
Available Balantu June 30, 1983 $( 1,176) $( 1,108) $( 565) $( 3,779) $( 11

Total Federal Award $ .50.000 $ R8,018 $ 25,000 $ 38,460 $ -
State Participation Level Oz 50% 20% 25% 1

-13-

STATE OF NEW HAMPSHIRE

OFFICE OF LEGISLATIVE BUDGET ASSISTANT

STATE HOUSE
HENRY F. GOODE CONCORD. NEW HAMPSHIRE 03301 GUY D. CHAFDELAINE, CPA
Legislative Budget Assistant Director 01 Audits
(603)271-2745
CHARLES L. CONNOR
Deputy Legislative Budget Assistant

REPORT ON INTERNAL ACCOUNTING CONTROL

TO THE FISCAL COMMITTEE OF THE GENERAL COURT:

We have examined the CONDENSED STATEMENT OF GENERAL AND SPECIAL FUNDS APPRO-
PRIATION OPERATIONS of the Office of State Planning (OSP) for the year ended
June 30, 1983 and the FINAL STATEMENT OF REVENUE AND EXPENDITURES FOR FEDERAL
GRANTS of the OSP for the periods ending September 30, 1982, June 30, 1983 and
September 30, 1983 as indicated therein. As part of our examination, we made a
study and evaluation of those internal accounting and administrative control
procedures that we considered necessary to evaluate the system as required by
generally accepted auditing standards and the criteria established by the US
General Accounting Office as set for in the Guidelines for Financial and
Compliance Audits of Federally Assisted Program2. and "Standards of Audits of
Governmental Organizations, Programs, Activities and Functions" issued by the
US Comptroller General 1972 (1981 revised). The purpose of our study and
evaluation was to determine the nature, timing and extent of the auditing
procedures necessary for expressing an opinion on the CONDENSED STATEMENT OF
GENERAL AND SPECIAL FUNDS APPROPRIATIONS OPERATIONS and the FINAL STATEMENTS OF
REVENUE AND EXPENDITURES FOR FEDERAL GRANTS. Our study and evaluation was more
limited than would be necessary to express an opinion on the system of internal
accounting control of the Office of State Planning taken as a whole.

The objectives of an.internal accounting control system are to provide manage-
ment with reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition and that transactions are
executed in accordance with management's authorization and recorded properly to
permit the preparation of financial statements in accordance with generally
accepted accounting principles.

Because of inheren't limitations in any system of internal accounting control,
errors and irregularities may nevertheless occur and not be detected. Also,
projections of any evaluation of the system to future periods is subject to the
risk that procedures may become inadequate because of changes in conditions or
that the degree of compliance with the procedures may deteriorate.

-14-

Our study and evaluation made for the,-limited purpose described in the first
paragraph would not necessarily disclose all material weaknesses in the system.
Accordingly, we do not express an opinion on the internal accounting control
system of the Office of State Planning taken as a whole or on any of the
categories of controls identified in the first paragraph. However, our study
and evaluation disclosed the following conditions which,we believe result in
more than a relatively low risk that errors or irregularities, in amounts that
would be material in relation to the financial statements of the Office of
State Planning, may occur and not be detected within a timely period.

FEDERAL GRANT LEDGER

Observations

9 No individual grant control summaries are kept for the entire grant
period making verification to the Financial Status Reports filed with
the federal agency cumbersome.

* Not all revenue and expenditures incurred in Fiscal Year 1983 were
posted to the Fiscal Year 1983 grants ledger making reconcilation to the
Comptroller's statement difficult.

e All transaction activity is not being posted to the federal grants
ledger. When expenditures are paid from the control account and
subsequently transferred to the subaccounts, only the postings to the
subaccounts are made. The original transaction and transfer are not
posted.

o Not all transactions in the ledger are clearly identified. Reductions
in appropriations and available balances are made without comment.

Recommendations

e Control summaries encompassing the life of each grant should be
maintained.

@ All revenue and expenditure transactions should be posted to-the fiscal
year in which they occur.

o All grant activity should be posted to the ledger and clearly identified
as to its nature.

9 The federal grants ledger should.be-maintained on a computerized system.
This would eliminate the time consuming job of posting to the manual
ledger.

-15-

PAY ROLL EXPENSE ALLOCATION

Observation

e Since.March 1983, payroll allocations to.the federal grants have been
made based on a time budget. 'No follow-up has been made to verify the
accuracy of this budget.

Recommendation

On a quarterly basis, compare the budget to the actual hours per the
time summaries to verify its accuracy.

FEDERAL GRANT ACCOUNTABILITY

Observation

9 Several grants are combined within one division code on the Statement of
Appropriations making it difficult to separate costs, appropriations,
lapses and encumbrances.

Recommendation

9 Each federal grant should be accounted for in a separate division code
on the Statement of Appropriations.

EQUIPMENT VALUATION

Observation

a The equipment valuation report to the Department of Purchase and
Property is overstated by $1,554.

Recommendation

e The Agency should adjust their equipment valuation and in the future,
promptly delete any item that is lost or surplused.

RSA COMPLIANCE

Observation

RSA 4:12e requires State Planning to-acquire and maintain a current
record of all large subdivision developments in the State for the
Governor. The Office believes this law to be outdated and therefore
maintains no records on this.

-16-

RSA COMPLIANCE (CONTINUED)

Recommendation

9 State Planning should request an interpretation on the meaning of "large
subdivision development" from the Attorney General. They should also
request the Governor to. review the RSA and determine whether such
information is necessary to him.

GRANT FILES

Observation

9 Pertinent financial information such as award amendment notification is
not being filed with the Business'Administrator as received by the
planners.

Recommendation

0 All pertinent grant 'financial data should-be filed with the Business
Administrator. A cover sheet detailing necessary information should be
in front of each folder for reference.

ICE THE LEG SLATIVE BUDG ASSISTANT

January 6, 1984
@SL@AT/
OICEX"THqE IVE BU@DG iAS

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STATE OF NEW HAMPSHIRE

OFFICE OF LEGISLATIVE BUDGET ASSISTANT

STATE HOUSE
HENRY F. GOODE CONCORD. NEW HAMPSHIRE 03301 GUY D. CHAPDELAINE. CPA
Legislative Budget Assistant DireCLor of Audits
(603) 271-2785
CHARLES L. CONNOR
Deputy Legislative Budget Assistant

REPORT ON COMPLIANCE

10 THE FISCAL COMMITTEE OF THE GENERAL COURT:

We have examined the CONDENSED STATEMENTS OF GENERAL AND SPECIAL FUND APPRO-
PRIATIONS OPERATIONS of the Office of State Planning (OSP) for the year ended
June 30, 1983 and the FINAL STATEMENTS OF REVENUE AND EXPENDITURES FOR FEDERAL
GRANTS of the OSP for the periods ending September 30, 1982, June 30, 1983 and
September 30, 1983 as indicated herein, and have issued our report thereon
dated January 6, 1984. Our examination was made in accordance with generally
accepted auditing standards; the provision of "Standards of Audits of Govern-
mental Organizations, Programs, Activities and Functions", promulgated by the
US Comptroller General, which pertain to financial and compliance audits; the
Guidelines for Financial and Compliance Audits of Federally Assisted Programs;
and applicable State Statutes governing the above-mentioned entity, and accord-
ingly, included such tests of the accounting records and other such auditing
procedures as we considered necessary in the circumstances.

In our opinion, except for the matters described in the following paragraphs,
tested grants described in the first paragraph did comply with the material
terms and conditions of its federal grants, State Statutes, contracts, and
agreements.

SUBGRANT MONITORING

Observation

a Initial subgrantee construction contracts were incomplete because
reporting requirements were not intended for construction projects nor
were waivers given to subgrantees for noncompliance with these reporting
requirements.

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SUBGRANT MONITORING (CONTINUED)

Recommendations

a Reporting requirements specifically intended for construction projects
should be used in future contracts.

e A written w aiver notice should be on file whenever State Planning
exempts a subgrantee from a contract requirement.

ICE THE LATIVE UDG ASSISTANT

January 6, 1984

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fI'C E '2rLATIVE @UDG AS,

OFFICE OF STATE PLANNING
STATE OF NEW HAMPSHIRE
2'7 BEACON STREET - CONCORD 03301
TELEPHONE 603-271'--9155

March 19, 198.4

Mr. Guy Chapdelaine
Office of Legislative
Budget Assistant

SUBJECT: Response to Audit Report
for the year ended June 30, 1983

Dear Guy:

First I would like to express my appreciation for the-cooperative attitude of your
staff throuqhout the process of developing the audit report. The unfortunate hos-
pitalization of the Business Administrator did add to the diffuculty of the process.
Fortunately everyone involved showed patience and understanding. Please extend my
thanks to those involved!

Secondly, this will serve to respond to each of the observations and recommendations.
As-you know, I originally expressed my concern with the tone of the original text
rather than the observations and recommendations. As a result of our discussions,
your were able to modify the tone without changing the actual observations. Because
of this effort, I have no comments other than to say the every effort will be made
to comply with the recommendations contained in the report.

Thank you for the opportunity to comment.

Si,ncerely,
(;@avi4 iGScott
Acting Director

DGS/sli

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