Louisiana Economic Development, the department in charge of promoting economic development in the state, could do a better job of auditing its own books, but it’s largely in compliance with state law, according to a report released Monday by the state’s legislative auditor.

Legislative Auditor Daryl Purpera’s report found that LED’s internal auditing for a two-year period starting in July 2012 was not based on a formal risk assessment and did not address any high-risk areas — a function that is required at least annually.

“LED does not have an effective internal audit function,” Purpera’s report said.

The report noted that the department’s internal audit of its fiscal year 2014 operations outlined the same 12 areas of potential concern as the previous year’s audit report but that only one area led to the issuance of a written report. There was no record that LED management took action on the other 11 areas, the auditor said in his 13-page report.

“Failure to document a formal risk assessment to identify high-risk areas and failure to perform procedures on high-risk areas and report the results to management diminishes LED’s ability to correct potential weaknesses that could result in the loss of assets, fraud and-or errors going undetected,” the report said.

The legislative auditor’s review included reviewing LED’s controls for monitoring and spending public money and complying with reporting requirements within several areas of the department’s programs, including a fund for recruiting major economic development projects.

Economic Development Secretary Stephen Moret said in a response included in the report that he disagreed with the auditor’s findings that were critical of his department’s auditing procedures.

Moret said the department discussed and identified high-risk areas with its internal auditor, even though the risk assessments were not done “in accordance with (the legislative auditor’s) desired format.”

Instead, LED officials prioritized high-risk areas for review, while areas that had recently been audited or had “extensive existing controls in place to mitigate risk” were subject to less scrutiny, he said, noting that the department’s internal auditor has developed an annual auditing plan and provides regular reports and recommendations.

Moret said his department recently hired a second internal auditor and the team has completed and implemented a new risk-assessment plan since the report was issued. LED management will now respond in writing to findings addressed by its internal auditors, he said.

Purpera’s report noted that LED did not submit on time a required status report to the Joint Legislative Committee on the Budget. Moret said that report, one of 34 reports he said LED is required to submit to the Legislature, has since been completed.

He blamed the missed deadline on his office’s recent successes, noting that his staff has been burdened by “the extremely heavy business development project load we’ve recently experienced (resulting in record levels of business investment and job creation in Louisiana).”

LED spent about $109 million in fiscal year 2014, including about $68.7 million in state commitments, largely to incentive programs awarded to IBM Corp. in Baton Rouge and the Benteler Steel plant in Shreveport.