Audit finds inefficiencies in Secretary of State’s Office

By Cy Ryan

Thursday, Dec. 9, 2010 | 2:05 a.m.

CARSON CITY — The Secretary of State’s Office has been slow in depositing the checks it receives, and it struggles with a large percentage of dropped telephone calls, a legislative audit says.

The examination reviewed 120 checks during two fiscal years and it found they were deposited an average of six working days late. Some were as much as 14 days late. The delay is resulting in less interest received by the state.

The audit said the delays were due in part to additional duties given to the office and a cutback in staffing.

The lag has now been reduced to one to five days, the audit said.

Secretary of State Ross Miller, in response to the audit released Wednesday, said the report found the state lost $3,400 in interest on about $12.4 million of deposits.

“The cost of adding approximately three to four additional staff people far outweighs the lost interest income mentioned, even with increased revenues and interest rates,” Miller said.

But he said steps would be taken to deposit checks faster.

The audit also found “checks were not restrictively endorsed when received as a safeguard against misuse.”

The report said that in fiscal 2010, the office answered 130,925 telephone calls but dropped 134,139, a 51 percent rate.

Nicole Lamboley, chief deputy secretary of state, said telephone calls flood the lines from 11:30 a.m. to 1:30 p.m. and some customers are put on hold for 24 to 30 minutes. She said changes are being made to address the problem.

The audit also found that the information systems for commercial recording and accounting lacked adequate password controls. And passwords are not periodically changed on the systems, putting them at risk “from hackers outside the organization,” the audit concluded.

Miller said security improvements were necessary but “it has been determined that it is too costly to modify the current system.” He said the computers are set to automatically lock after 15 minutes of inactivity, but that is a temporary solution.

In other audits:

• More than $5 million in insurance premium tax was not collected for three years by the state Department of Taxation “because of errors, inaccuracies and unsupported deduction were not identified or corrected.”

The state Division of Insurance also is involved in the collection.

Dino DiCianno, director of the tax department, said there needs to be greater cooperation between the two agencies. He said he has only one employee available to work on the collections. The tax yielded $234 million in fiscal 2010 and is the state’s third largest tax collected.

• A review of six of the 57 governmental and private facilities for children found a common problem involving medication.

“Errors included not following physicians’ orders, missing or incomplete medication documentation, and youths not receiving medications timely,” the audit found. It said the training of employees needs to be strengthened in the administration of medication.

One of the facilities inspected was the Spring Mountain Youth Camp in Clark County, and it had the medication administration problems.

The audit also recommended better guidelines to monitor and screen movies and video games. “This may have contributed to “R” rated movies observed in three of the five dorms,” the audit said.