Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Veterans Affairs

Financial Audit July 1, 1994
through December 31, 1996

 

Public Release Date: April 18, 1997 No. 97-20

Background

The Department of Veterans Affairs was created in 1943 to meet the needs of returning World War II veterans. Since its creation, the department has served veterans from the Korean War, the Vietnam War, the Southwest Asia (Persian Gulf) War and other conflicts. The department is organized into three program areas: state benefits and grants, services, and departmental operations. These program areas give assistance to eligible veterans and their dependents. In addition, the departmental operations program provides administrative services for the department. Mr. Bernie Melter serves as the commissioner.

Audited Areas and Conclusions

Our audit objectives were to gain an understanding of the Department of Veterans' Affairs' internal control structure over the accounting and reporting of its financial activities, including its guardianship program revenues and expenditures, payroll expenditures, State Soldiers Assistance Program expenditures, County Veterans Service Officer Grants, and grants to nongovernmental organizations. We also designed our audit to provide reasonable assurance that the Department of Veterans Affairs complied with significant finance-related legal provisions.

The Department of Veterans Affairs designed and implemented internal controls that provided reasonable assurance that guardianship revenues and expenditures, payroll and grant expenditures were accurately reported in the accounting records and that guardianship expenditures were appropriate and properly authorized.

Guardianship revenues and expenditures tested were accurately reported in the accounting records and posted to individual client accounts. In addition, guardianship expenditures tested were appropriate, properly authorized and adequately supported. We noted, however, that the department allocated investment income to client accounts based on an incorrect amount provided by the Department of Finance.

Payroll transactions tested, including employee timesheets, were properly authorized and accurately recorded in the accounting records. In addition, the department used appropriate pay rates when calculating payments to staff. However, we found that two employees have incompatible access to both payroll and personnel functions in SEMA4.

Expenditures tested from the State Soldiers Assistance Program and the Vinland National Center grant were adequately supported and made to or on behalf of eligible clients. In addition, for the expenditures tested, the department complied with applicable legal provisions when awarding and disbursing grant funds.

 

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