|Public Release Date: September 13, 1996||No. 96-37|
The Lola and Rudy Perpich Minnesota Center for Arts Education (center) is located in Golden Valley, and offers a high school curriculum for artistically talented students. The center also oversees the operation of a resource center for improving arts education in Minnesota. The executive director of the center is David O'Fallon. A resource center advisory council and board of directors provide input on matters affecting resource center programs and operations.
The center recorded financial transactions on its own accounting system and the statewide accounting (SWA) system. The center had revenues and expenditures of approximately $5.3, $5.6, and $5.9 million during fiscal years 1993, 1994, and 1995, respectively.
We focused our review of revenues on the center's control over cash collections and the proper identification of receipts on the accounting systems. The center continued to lack adequate accounting information to support student billings, refunds, and escrow account balances. In addition, the center did not properly control food service cash collections. These issues were also cited as problems in our prior audit report.
Our review of expenditures focused on determining if: internal controls were adequate, expenditures were properly recorded, and expenditures were reasonable and in compliance with applicable guidelines. The center's controls were adequate to ensure that disbursements were recorded properly on the state's accounting system, reasonable, and in compliance with established guidelines. However, the center should improve controls over reporting of payroll, leave, contract administration, grant reporting deadlines, and imprest cash reconciliations. The center also should establish a process to identify and resolve potential conflicts of interest. These issues, with the exception of contract administration and grant reporting deadlines, also were cited as problems in our prior audit report.