Report No. 2011-100
November 2011
Complete Report
Findings in the audit of the Princeton Contract License Office
Background
The Department of Revenue has appointed 183 contract agents to operate contract license offices. These offices issue driver licenses; titles for motor vehicles, trailers, and marine craft; and license plates. Contract agents are compensated through transaction-based processing fees. Under a state law which became effective in 2009, the State Auditor may audit contract license offices. This audit is one of the initial 10 contract license offices audited by the State Auditor.
Prepayment Void Transactions
The Princeton contract license office did not maintain proper documentation of prepayment void transactions. Prepayment void transactions occur when a transaction is entered into the processing system but is voided before payment is made. Department of Revenue official procedures require license offices to document the reason for any void, obtain the customer's signature acknowledging the void, and have a supervisor and/or manager review and approve the void. The Princeton contract license office lacked documentation of customer acknowledgment for the 6 void transaction occurring between April and June 2011, did not document manager approval of these transactions, and did not document the reason for voiding 3 of these transactions.
Contract Compliance
The Princeton contract license office is not complying with the agent contract requirement to update inventory records on a daily basis. Inventory records were incorrect for 5 of the 40 items we reviewed, which increases the risk of theft and/or impropriety.
Accounting Controls and Procedures
The Princeton contract license office needs to improve its accounting controls and procedures. The license office did not always accurately record the method of payment, such as cash or check, and did not reconcile the composition of monies received to deposits, as required by Department of Revenue procedures.
In the areas audited, the overall performance of this entity was Fair.*
American Recovery and Reinvestment Act 2009 (Federal Stimulus)
The Princeton contract license office did not receive any federal stimulus monies during the audited time period.
*The rating(s) cover only audited areas and do not reflect an opinion on the overall operation of the entity. Within that context, the rating scale indicates the following:
Excellent:
The audit results indicate this entity is very well managed. The report contains no findings. In addition, if applicable, prior recommendations have been implemented.
Good:
The audit results indicate this entity is well managed. The report contains few findings, and the entity has indicated most or all recommendations have already been, or will be, implemented. In addition, if applicable, many of the prior recommendations have been implemented.
Fair:
The audit results indicate this entity needs to improve operations in several areas. The report contains several findings, or one or more findings that require management's immediate attention, and/or the entity has indicated several recommendations will not be implemented. In addition, if applicable, several prior recommendations have not been implemented.
Poor:
The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management's immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
