RD129 - Secretary of Finance Report on Audit for the Year Ended June 30, 2015

Executive Summary:
This report summarizes our fiscal year 2015 audit results for the five agencies under the Secretary of Finance and arises from our work on the Comprehensive Annual Financial Report. Overall, our audit for the year ended June 30, 2015, found the following:

• Proper recording and reporting of transactions, in all material respects, in the Commonwealth Accounting and Reporting System and in the agencies’ accounting systems;

• Internal control and compliance findings requiring management’s attention; and

• Adequate corrective action with respect to audit findings reported in the prior year that are not repeated in this report.

This report also includes information on the following significant initiatives for agencies under the Secretary of Finance.

Status of System Development Project

The Commonwealth is in the process of implementing the Cardinal System, a statewide accounting and financial reporting system. The Commonwealth implemented Phase one of the Cardinal System project in December 2011 with the implementation of the Department of Transportation’s financial system. Phase two of the implementation occurred in October of 2012 with the Department of Accounts implementing the base modules of Cardinal. Phase three of the implementation occurred in two waves. Wave 1 involved agencies who directly key transactions into Cardinal, and this was completed in October 2014. Wave 2 involves agencies who interface data from their independent financial system into Cardinal and this final stage is on schedule for completion by February 2016. Cardinal will become the official system of record by the beginning of fiscal year 2017 with the retirement of the existing CARS financial system.