Michigan Department of Transportation

Michigan Office of the
Auditor General
Thomas H. McTavish, C.P.A.
Auditor General

EXECUTIVE DIGEST #5910097
Michigan Department of Transportation

INTRODUCTION
This report contains the results of our financial audit, including the provisions of the Single Audit Act, of the Michigan Department of Transportation for the period October 1, 1994 through September 30, 1996.

AUDIT PURPOSE
This financial audit was conducted as part of the constitutional responsibility of the Office of the Auditor General and is required on a biennial basis by Act 251, P.A. 1986, to satisfy the requirements of the Single Audit Act of 1984 and the federal Office of Management and Budget Circular A-128, Audits of State and Local Governments.

BACKGROUND
The Department's mission is to provide the people of Michigan with a safe, efficient, and environmentally sound total transportation system in the most cost-effective manner possible. The Bureau of Finance and Administration is responsible for the Department's financial accounting and financial reporting. The responsibilities for federal grant management are shared by the bureaus that carry out the grant activities. As of September 30, 1996, the Department had 3,867 employees.

The Department's major sources of financing are tax revenue dedicated for transportation purposes and federal funds. During fiscal 1995-96, the Department's revenue totaled approximately $2.25 billion and expenditures totaled $2.17 billion.

AUDIT OBJECTIVES AND CONCLUSIONS

Audit Objective: To assess the adequacy of the Department's internal control structure, including applicable administrative controls related to the management of federal financial assistance programs.

Conclusion: Our assessment of the internal control structure did not disclose any material weaknesses . However, we did note reportable conditions pertaining to the monitoring of subrecipients for compliance with federal regulations, budget and actual statements, classification of expenditures, and controls over payroll/personnel functions (Findings 1 through 4).

Also, our assessment indicated that the Department was in substantial compliance with the requirements set forth in Sections 18.1483 - 18.1488 of the Michigan Compiled Laws pertaining to its systems of internal accounting and administrative control.

Audit Objective: To assess the Department's compliance with both State and federal laws and regulations that could have a material effect on either the Department's financial statements or any of its major federal financial assistance programs.

Conclusion: Our assessment of compliance with laws and regulations did not disclose any instances of noncompliance that could have a material effect on theDepartment's financial statements or any of its major federal financial assistance programs.

Audit Objective: To audit the Department's financial statements for the fiscal years ended September 30, 1996 and September 30, 1995.

Conclusion: We expressed an unqualified opinion on the Department's financial statements.
AUDIT SCOPE
Our audit scope was to examine the financial and other records of the Michigan Judges Retirement System for the period October 1, 1994 through September 30, 1996. Our audit was conducted in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances.

Our audit objective for the assessment of the internal control structure included an evaluation of the Department's implementation of the requirements for establishing and maintaining systems of internal accounting and administrative control, as set forth in Sections 18.1483 - 18.1488 of the Michigan Compiled Laws.
AGENCY RESPONSES AND PRIOR AUDIT FOLLOW-UP
Our audit report contains 4 findings and 5 recommendations. The Department's preliminary response indicated that it concurred and will comply with all of the recommendations.

The Department has complied with all 5 of the prior audit recommendations included within the scope of our current audit.
Full Audit Report - #5910097 - Michigan Department of Transportation

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This page was created on 3/28/98.