|Public Release Date: March 29, 1996||No. 96-13|
The Department of Finance manages the state's accounting, budgetary, and debt management activities. The department maintains the state's accounting system and monitors controls to prevent unauthorized transactions. The Commissioner of Finance, appointed by the Governor, directs the department's operations. Laura King was appointed commissioner in October 1994.
Our work in the Department of Finance is completed as part of our annual Statewide Audit. The primary objective of the Statewide Audit is to render an opinion on the State of Minnesota's financial statements included in its Comprehensive Annual Financial Report for fiscal year 1995. This objective included whether the financial statements presented fairly its financial position, results of operations, and changes in cash flows in conformity with generally accepted accounting principles.
As part of our work, we gained an understanding of the internal control structure and ascertained whether the Department of Finance complied with laws and regulations that may have a material effect on the state's financial statements. Our audit scope focused on the Department of Finance's financial reporting responsibilities and the following areas that were material to our Statewide Audit objectives in fiscal year 1995: master lease program, general obligation bond sales, debt service transfers, school energy loans, component unit transfers, statewide indirect costs, and federal cash management.
The State of Minnesota's Comprehensive Annual Financial Report for the fiscal year ended June 30, 1995, includes our unqualified audit opinion, issued thereon, dated December 1, 1995. The compliance section of the Minnesota Financial and Compliance Report on Federally Assisted Programs for the fiscal year ended June 30, 1995, will include our reports on the internal control structure and compliance with laws and regulations for the state as a whole. We anticipate issuing that report in June 1996.
In addition, this report discusses our conclusions on the areas reviewed in the Department of Finance. We found that the department did not perform certain cash control procedures during fiscal year 1995. In addition, the department did not appropriately record certain debt transactions on the accounting system. Finally, the department incorrectly calculated interest liabilities related to the federal cash management improvement act.