Report on Follow-up Audit of the Accumulated Surplus at Oregon's Internal Service Funds

EXECUTIVE SUMMARY:

This final report provides the results of our follow-up audit of the accumulated surplus at Oregon's Internal Service Funds (ISF). We found that the State of Oregon had not implemented the recommendations of two previous ISFs audits by the Office of Inspector General. Consequently, the State of Oregon's ISFs had an accumulated surplus at June 30, 1991 of $64.4 million, an increase of $14.5 million (29 percent) since the first audit. We have estimated the Federal share of the total accumulated surplus at June 30, 1991 to be approximately $12.1 million. The surplus represented the excess of revenues generated from services and products provided over expenses incurred by ISFs. We recommended that the State of Oregon refund the $12.1 million Federal share of the accumulated surplus and adjust billing rates at least annually to eliminate any surplus or deficit.