Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Commerce

Selected Scope Financial Audit

For the Period July 1, 1992, through June 30, 1995

 

Public Release Date: August 9, 1996 No. 96-31

Background Information

The mission of the Department of Commerce is to enforce state laws and safeguard consumers' rights and investments, resolve conflicts between consumers and industry, and enhance the stability and strength of the financial and regulated industries. David Gruenes became commissioner of the department in December 1995. During the period covered by our audit, Bert McKasy was commissioner until July 1993, and James Ulland served as commissioner from September 1993 until December 1995.

The Enforcement and Licensing Division was the primary focus of this audit (in addition to payroll for the department overall). It is one of four operating divisions. The Enforcement and Licensing Division is responsible for ensuring that the licensees in the regulated industries of insurance, real estate, cosmetology, and others, meet the standards of knowledge, training, and conduct to receive and maintain a license. The division also receives and investigates complaints regarding these industries and licensees.

Audit Scope and Objectives

We audited the following financial activities of the Enforcement and Licensing Division (division), and payroll for the Department of Commerce overall, for the three years ended June 30, 1995: license revenues, unclaimed property receipts and disbursements, Real Estate Education, Research and Recovery Fund, Contractors' Recovery Fund revenues and expenditures, and administrative expenditures.

Conclusions

The division administered unclaimed property receipts and payments to individuals in compliance with applicable finance related legal provisions. We could not, however, verify the propriety of unclaimed property payments to other states on behalf of relocated Minnesota residents because of the lack of supporting documentation. Also, the department needs to improve controls over unclaimed property it receives.

The division collected the appropriate license fees and recovery fund fees as set in statute for the audit period. However, the department did not verify the accuracy of the amounts submitted by building contractors for the Contractors' Recovery Fund. The division adequately safeguarded and properly recorded the fees in the statewide accounting system.

The Department of Commerce processed department payroll, division recovery funds expenditures, and administrative expenditures in accordance with applicable laws and regulations. These expenditures were made for a proper purpose and accurately recorded in the statewide accounting system. The division needs to improve internal controls over payments made from the recovery funds.

 

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155