A government audit of the Tennessee Department of Commerce and Insurance (TDCI) has found that the agency has managed to reduce costs and operate efficiently during the economic downturn.
In fact, the state Comptroller’s audit found no issues with how the TDCI is being run.
Audit findings are formal, negative declarations of deviations from standards or deficiencies in an agency’s operations. TDCI’s audit returned no findings.
“It’s always a noteworthy accomplishment to avoid audit findings in a Comptroller’s report. I am extremely proud of my entire department, for ensuring that operations comply with state and federal standards of operation,” said TDCI Commissioner Leslie A. Newman.
The department comprises numerous sections, ranging from the Divisions of Consumer Affairs, Securities and Insurance, to regulatory boards that govern professions such as barbers and beauty salons, certified public accountants and real estate agents. Administratively attached to the department are the E-911 Board, the Tennessee Law Enforcement Training Academy, the Fire Service and Code Enforcement Academy and the Tennessee Athletic Commission.
The Comptroller audited the TDCI for the period June 1, 2006, through Aug. 31, 2008. The audit scope included a review of internal control and compliance with laws, regulations, and provisions of contracts in the areas of Tennessee Law Enforcement Training Academy cash receipts, travel, payment cards, the Employee Leasing Program, surplus lines insurance, and the Financial Integrity Act.
For example, auditors looked at whether TCDI travel expenses complied with state requirements. They found no problems.
The story was the same in the audit of the Employee Leasing Program. Auditors tested all new leasing agency applications and renewals for the months of April 2008 and May 2008 to determine if the leasing agencies paid the appropriate fees and submitted the required documentation including financial statements, surety bonds and certificates of insurance. They tested a sample of 25 leasing agency files and reviewed whether complaints concerning leasing agencies were processed by the department in a timely manner.
The auditors determined that the leasing agencies paid the appropriate fees; the leasing agency applicants provided the required financial statements or surety bond; the leasing agencies submitted a certification from an independent CPA showing that payroll taxes were paid on a timely basis; the leasing agencies provided a certificate of insurance showing that all employees were covered by workers’ compensation in accordance with the laws of the state; and complaint files regarding leasing agencies were processed by the department in a timely manner, with minor exceptions.
In the area of regulation of surplus lines insurance, the Comptroller’s auditors performed tests on a sample of 60 gross premium tax payments from June 1, 2006, through June 27, 2008, to determine if the surplus lines agents submitted the correct gross premium taxes due to the department in a timely manner and the agents had the required license to procure surplus lines insurance. They also tested all 361 surplus lines insurance policies accompanying the 60 tax payments tested to determine if the policies were reported within two months after the end of the prior six-month period and the agents completed the affidavits within 30 days of the effective date of any new or renewal surplus lines contract and filed the affidavits in a timely manner.
The auditors determined that the surplus lines agents submitted the correct gross premium taxes due to the department in a timely manner; the surplus lines agents had the required license to procure surplus lines insurance; the surplus lines insurance policies were reported within two months after the end of the prior six-month period, with a minor exception; and the surplus lines agents completed affidavits within 30 days of the effective date of any new or renewal surplus lines contract and filed the affidavits with the department in a timely manner, with minor exceptions.
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