Audit: Nevada museum gift shops need to up their game

Nevada isn’t keeping good tabs on its toys.

A legislative audit released last month found several problems with how gift shops at state-run museums are keeping records on the souvenirs they stock. Staff members often adjust inventory numbers in their computer system to match their year-end counts and don’t offer written explanations of the changes, and the shops are also improperly recording deliveries of toys, books and musical instruments valued at thousands of dollars.

“These control weaknesses increase the risk of undetected theft and loss, unexpected shortages of merchandise, and unnecessary purchases of items already on hand,” auditors wrote in a report presented to lawmakers Nov. 19 after checking in on the Las Vegas State Museum, Carson City State Museum and Carson City Railroad Museum.

Museum officials blame the problems on chronic staffing shortages from recession-era layoffs and budget cuts that forced full-time museum workers to switch to part-time status. They also pointed to a glitch-prone cash processing computer system they purchased in 2008 but plan to replace by summer.

“Over time we have found that despite regular software updates, the Retail Star product has many shortcomings,” the division wrote about the system. “That, together with limited staff dedicated to museum store operations, is fundamentally how this weakness developed.”

Auditors also found that a program that creates commemorative medallions isn’t keeping proper track of the valuable metal blanks used in the process.

“The division did not maintain adequate records of the number of medallion blanks used for each project,” auditors wrote. “Without records documenting which projects the purchased blanks were used on, we were unable to account for a minor number of blanks.”

Over the 18 months that ended in December 2014, the Carson City State Museum minted more than 10,700 medallions, bringing in $156,000 in sales revenue.

The program began as simple educational demonstrations of how a 1870s mint worked, but has grown to include a variety of collectible designs, including a four-part series celebrating the 150th anniversary of Nevada statehood. As the program becomes increasingly popular, more people should be tracking inventory to ensure accountability, auditors said.

Museum officials acknowledged that the program has grown considerably over the past two years and the need to step up its tracking processes.

They plan to increase internal controls over the program by next summer, they said.

The state Division of Museums and History operates six museums, including the three that were audited, the Lost City Museum and the Boulder City and East Ely railroad museums. Combined, they took in $1.5 million in revenue over 18 months.