What the DCP Audit Report (FY 2018-2020) Found

Key Concerns & Findings

1. Inaccurate Accounts Receivable Reporting

• Issue: DCP reported over $21.9 million in outdated and uncollected accounts receivables, some dating back to 2017, and did not promptly write off uncollectible debts.
• Why It Matters: Overstates financial assets and reduces accuracy in state financial reports.
• Recommendation: DCP should review outstanding receivables and write off uncollectible balances in accordance with State Comptroller guidance.

2. Failure to Establish Accounts Receivables for Penalties

• Issue: DCP did not record any accounts receivables for unpaid fines and penalties between 2017 and 2021.
• Why It Matters: Lost revenue for the state and poor financial accountability.
• Recommendation: Implement a formal process for reporting imposed penalties to the Business Office and tracking collections.

3. Flawed Settlement Agreements & Final Decisions

• Issues:
• Settlement agreements instructed payments to an incorrect state fund.
• Did not provide statutory appeal deadlines for respondents.
• Lack of written procedures for reviewing settlement agreements before approval.
• Why It Matters: Increases legal risk, confusion for respondents, and financial mismanagement.
• Recommendation: Revise agreements for accuracy, include appeal deadlines, and require internal review before approval.

4. Failure to Maintain an Accurate Dealer List (Lemon Law Program)

• Issue: DCP did not properly track vehicle dealers required to pay surcharges under the New Automobile Warranties Program, resulting in a loss of approximately $22,000 in payments.
• Why It Matters: Reduces funding for the Lemon Law Arbitration Program, impacting consumer protections.
• Recommendation: Regularly update the dealer list, verify business closures, and follow up on missed surcharge payments.

5. Software Inventory Deficiencies

• Issue: DCP’s software inventory records were missing critical information such as serial numbers, installation dates, and assigned identification numbers.
• Why It Matters: Increases the risk of software loss, security vulnerabilities, and mismanagement of IT resources.
• Recommendation: Ensure software records meet State Property Control Manual requirements.

Key Takeaways & Concerns

Lack of financial oversight has led to millions in uncollected debts and fines. Poor record-keeping impacts state revenue collection. Legal document errors create risks for the department and the state. Ineffective monitoring of state programs (e.g., Lemon Law) reduces funding for consumer protection efforts. Outdated IT inventory increases security and operational risks.