AUDIT SUMMARY

 

Our audit of the Department of Human Resource Management (Human Resource Management) for the year ended June 30, 2024, found:

 

• •  proper recording and reporting of all transactions, in all material respects, related to the State Health Plans Program for Pre-Medicare Retirees, the Health Insurance Fund, the Local Choice Health Care Fund, the Line of Duty Act Fund, and the Workers’ Compensation Fund, in the Commonwealth’s accounting and financial reporting system, in Human Resource Management’s accounting records, and in supplemental information and attachments submitted to the Department of Accounts (Accounts), after adjustment for the misstatements noted in the finding “Strengthen Controls over Financial Reporting”;
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  • three matters involving internal control and its operation necessary to bring to management’s attention; two of which are considered a significant deficiency and one that is considered a material weakness;

 

• • no instances of noncompliance with applicable laws and regulations or other matters that are required to be reported; and

 

• • adequate corrective action with respect to two prior audit findings and recommendations identified as complete in the Findings Summary included in the Appendix.

 

In the section titled “Internal Control and Compliance Findings and Recommendations” we have included our assessment of the conditions and causes resulting in the internal control and compliance findings identified through our audit as well as recommendations for addressing those findings.  Our assessment does not remove management’s responsibility to perform a thorough assessment of the conditions and causes of the findings and develop and appropriately implement adequate corrective actions to resolve the findings as required by Accounts in Topic 10205 – Agency Response to APA Audit of the Commonwealth Accounting Policies and Procedures Manual.  Those corrective actions may include additional items beyond our recommendation.

 

Human Resource Management is one of several entities cited in a risk alert in Accounts’ fiscal year 2024 audit report.  The “Financial Reporting” risk alert identifies the increased risk that the Commonwealth may not meet the deadline for the Annual Comprehensive Financial Report, which could jeopardize the Commonwealth’s bond rating, because multiple agencies have increasingly submitted inaccurate and late financial information to Accounts over the past several fiscal years.  As an entity that is contributing to this increased risk for the Commonwealth, Human Resource Management’s corrective action to correct the issues in the finding “Strengthen Controls over Financial Reporting” is essential to reducing the risk to the Commonwealth.