Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Finance

Programs Selected for
Fiscal Year 1996 Statewide Audit

 

Public Release Date: March 19, 1997 No. 97-14

Agency Background

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. Following Laura King's resignation in October 1996, Wayne Simoneau was appointed commissioner.

Audit Scope and Conclusions

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 1996. This objective included determining whether the financial statements presented fairly its financial position, results of operations, and changes in cash flows in conformity with generally accepted accounting principles. The Statewide Audit is also designed to meet the requirements of the Single Audit Act of 1984, relating to federal programs.

As part of our work, we gained an understanding of internal controls and determined 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 on the following areas that were material to our Statewide Audit objectives in fiscal year 1996: general obligation and state revenue bond sales, debt service transfers, master lease program, school energy loans, appropriation transfers to the University of Minnesota, federal cash management, and statewide indirect costs.

We found that the department must make various changes in its procedures to improve the external financial reporting process in the future. This includes improvements in the procedures for identifying accounts payable and compensated absence liabilities. We also found that the department needs to improve controls over loan receivable accounting and interfund transfers. The department must also work with the Office of the State Treasurer and the Department of Public Safety to improve the timeliness of recording deputy registrar receipt collections. Finally, the department needs to improve controls over payment of appropriations requiring matching funds.

We also concluded that, for the items tested, the department complied with applicable legal requirements governing general obligation and state revenue bond sales, debt service transfers, the master lease program, transfers to the University of Minnesota, federal cash management, and statewide indirect costs.

 

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