The Department of Legal Affairs is responsible for the enforcement of State consumer protection and antitrust laws, as well as civil prosecution of criminal racketeering.  Our audit focused on the Department’s administrative activities, including cash receipts, accounts receivable, records management, budget management, and cost allocation.  During the 2003-04 fiscal year, Department revenues totaled $167 million and expenditures totaled $171 million.  Our audit covered the period February 2004 through January 2005 and disclosed the following: 

Finding No. 1:     The Department’s procedures to secure and process cash receipts were in need of improvement.

Finding No. 2:     The Department did not always properly record accounts receivable.  Additionally, the Department’s procedures were not adequate to properly establish the allowance for uncollectible accounts or to determine when uncollectible accounts should be written off.

Finding No. 3:     The Department needs to improve its procedures and documentation of the review of cellular telephone bills and the periodic review of billing options. 

Finding No. 4:     The Department did not have policies and procedures regarding the appropriate usage of the Department’s instant messaging system.

Finding No. 5:     The Department had not implemented effective processes to ensure that the fund balance of the Legal Affairs Revolving Trust Fund does not exceed statutory maximums.  Additionally, the Department did not perform periodic reviews of its other trust funds’ balances.

Finding No. 6:     The Department transferred $3.4 million between funds and budget entities without appropriate authorization.

Finding No. 7:     The Department did not properly allocate administrative costs, thereby precluding accurate and complete determination of the total costs of various organizational units and program activities within the Department.

The Department's response is included in its entirety at the end of this report as Exhibit 2.