We have audited the payroll cycle, including related fringe benefits, of the Department of Corrections (Corrections), including the Virginia Parole Board, for the year ended June 30, 2025.  Our audit found:

 

• • proper recording and reporting of all transactions, in all material respects, in the Commonwealth’s human resource and payroll management system, Corrections’ accounting records, and in supplemental information and attachments submitted to the Department of Accounts, after adjustment for the misstatements noted in the finding “Improve Financial Reporting Controls over Leave Liability”;

 

• • two matters involving internal control and its operation requiring management’s attention, one of which also represents an instance of noncompliance with applicable laws and regulations that is required to be reported under Government Auditing Standards; and

 

• • corrective action on the prior audit finding remains ongoing as indicated in the Findings Summary included in the Appendix.

 

In the section titled “Internal Control and Compliance Findings and Recommendations” we have included our assessment of the conditions and causes resulting in the internal control and compliance findings identified through our audit as well as recommendations for addressing those findings.  Our assessment does not remove management’s responsibility to perform a thorough assessment of the conditions and causes of the findings and develop and appropriately implement adequate corrective actions to resolve the findings as required by the Department of Accounts in Topic 10205 – Agency Response to APA Audit of the Commonwealth Accounting Policies and Procedures Manual.  Those corrective actions may include additional items beyond our recommendation.

 

We also performed a separate review of internal controls over contract procurement, contract management, and expenses related to contractual services, which are not material to the Commonwealth’s Annual Financial Report but were identified as financial cycles for additional review under a new risk-based approach.  We communicated the results of that review in a separate letter to management titled “Department of Corrections Internal Control Questionnaire Review Results as of December 2025.”