Auditors say state printer doesn't charge enough

Legislative auditors say the State Printing Division doesn't charge enough for its services.

The Legislative Audit Subcommittee this week reported the division operated at a loss of about $450,000 during an 18-month period ending Dec. 31.

"In our prior audit, we recommended the division develop procedures to establish and monitor billing rates to ensure the rates cover the cost of doing work," auditors said Tuesday. "Although some procedures were developed, they are incomplete and not always followed."

Printer Don Bailey told the subcommittee his operation has had problems because of turnover in financial officers, but he is establishing a system to regularly review and adjust rates for jobs such as stationery, forms, reports and books.

During the 18-month period, the division reported $5.8 million in sales and $6.2 million in expenditures.

The problem, auditors found, is that the print shop incorrectly estimated billable hours by 23 percent and actual costs by 10 percent.

Auditors said the print shop could have increased rates and still remained more than competitive with commercial printers.

A survey of commercial print costs showed the division charges were 32 percent lower.

Bailey was advised to revise the print shop's hourly billing rates and to review them on a regular basis, to develop written pricing policies and to improve inventory management so the printer doesn't accumulate too much specialized paper and other materials.