Audit: Nevada forestry division failed to bill about $32 million in out‑of‑state fire costs

The Legislative Counsel Bureau audit division reported to the Audit Subcommittee on Dec. 19, 2024, that the Nevada Division of Forestry (NDF) did not bill other jurisdictions for about $32 million in fully reimbursable out‑of‑state fire response costs paid with Nevada general fund dollars.

The finding matters because NDF pays costs up front and later seeks reimbursement from the federal government or the state that requested assistance; when reimbursement requests are not submitted promptly, NDF’s forest fire suppression budget account can run short and the state may need supplemental appropriations. The audit was performed under Senate Bill 480, Chapter 334, Statutes of Nevada 2023, which required the legislative auditor’s review.

Legislative auditors said NDF’s incident business unit (IBU) did not bill for many out‑of‑state incidents and did not record accounts receivable in accordance with generally accepted accounting principles and the State Controller’s policies. The auditors sampled 168 incidents and found 166 out‑of‑state responses from fiscal years 2020–2023 that had not been invoiced; that sample alone accounted for more than $22.8 million paid to cooperating fire partners that was not invoiced. Auditors also estimated NDF’s own personnel and equipment costs not billed were about $1.2 million, and identified an additional $7.3 million in fiscal 2024 expenditures paid to cooperators that had not been billed as of October 2024.

"We calculated over $32,000,000 in reimbursable expenditures which NDF had not billed for reimbursement," Deputy Legislative Auditor Katrina Hummlik told the subcommittee during the presentation.

Auditors further found invoice errors. In a sample of 15 invoices that NDF did bill, three were underbilled by a total of more than $542,000; auditors said NDF planned to send supplemental invoices for those matters. The audit also identified cooperator invoice errors and inconsistent cooperative rates that left NDF paying higher administrative fees and caused NDF to overpay roughly $250,000 in some years.

NDF officials acknowledged the problems and described operational and systems issues that contributed. "We own this issue, and we are working on it today and have been for the last four years," said KC Casey, State Forester and Fire Warden. Casey said a multi‑year transition to an automated billing system and turnover in the small incident‑billing unit contributed to missed billings and billing errors. Director James Suttlemeyer said reimbursements, when received, may be swept to the general fund and are not automatically available to NDF without separate authority through the interim finance committee or the legislature.

Auditors recommended NDF timely invoice reimbursable out‑of‑state incidents, properly record accounts receivable, improve billing accuracy, and separate accounting for out‑of‑state versus in‑state fire costs in the forest fire suppression budget account. The audit report lists 13 recommendations; NDF accepted all of them.

At the meeting, members pressed NDF on staffing, how much of the unbilled amount is federal versus state, and why the division requested supplemental appropriations as it works to collect reimbursements. Casey told the subcommittee NDF had invoiced about $18 million as of the briefing and had dedicated staff and a contractor working to back‑bill earlier years; the division said it expected to finish invoicing fiscal 2023 work soon and was moving into fiscal 2024 items.

The subcommittee voted to approve the audit report. Legislative auditor Dan Crossman noted the audit follow‑up process: agencies must submit a corrective action plan 60 working days after the meeting and the Governor’s Finance Office will provide a six‑month status report that the audit division will review and bring back to the committee.

Ending: NDF accepted the audit’s recommendations and told the subcommittee it had added staff and a contractor to complete back‑billing; the audit follow‑up schedule will provide opportunities to track progress and re‑examine whether reimbursements reduce future supplemental funding needs.