Minnesota Office of the Legislative Auditor
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Report Summary
Minnesota State Colleges and Universities System

Selected Material Financial Statement Components
and Federal Financial Assistance Programs
Fiscal Year 1996

 

Public Release Date: June 6, 1997 No. 97-29

Background Information

The Minnesota State Colleges and Universities System (MnSCU) began operations on July 1, 1995. The new MnSCU system combined the former state universities system and the former community college system with the technical colleges which had been local government entities prior to the merger. A 15 member board of trustees was appointed by the governor on July 1, 1995, to oversee the activities of MnSCU. Dr. Judith Eaton was appointed the first MnSCU chancellor effective August 15, 1995.

Scope and Objectives

We audited selected material financial activities of MnSCU as part of our audit to express an opinion on the State of Minnesota's fiscal year 1996 financial statements. Those activities included tuition and fees, Pell Grant revenues and expenditures, and material revenue, expenditure, and asset balances in the MnSCU Enterprise Activities and Supplemental Retirement Funds.

In addition, we audited the following major federal financial assistance programs administered by MnSCU: Pell Grant program, the Perkins Loan program, the Federal Family Education Loan (FFEL) subsidized and unsubsidized Stafford Loan programs, and Carl D. Perkins Vocational Education Basic Grant program for fiscal year 1996. We also reviewed internal controls over material federal student financial aid programs at five colleges and universities for fiscal year 1997.

The primary objectives of our audit were to determine if the state's financial statements were materially correct for the areas included in our financial audit scope, to gain an understanding of the internal control structure, and to determine compliance with material legal provisions, including federal regulations.

Conclusions

MnSCU material financial activities included in our audit scope were fairly presented in the State of Minnesota's Fiscal Year 1996 Comprehensive Annual Financial Report in accordance with generally accepted accounting principles. MnSCU experienced significant problems, however, in obtaining financial information which impacted its ability to prepare timely and complete financial statements.

MnSCU also administered material federal financial assistance programs in compliance with federal requirements, except that we noted a few overawards to students, and undocumented adjustments to cost of attendance budgets in certain cases. We concluded that internal controls provided reasonable assurance that MnSCU administered the federal programs in accordance with regulations. We noted isolated control weaknesses, however, at certain campuses including concerns over access to financial aid computer systems, lack of controls over financial aid disbursements, and minor exceptions to cash management and federal reporting procedures affecting the community college loan management system and Vocational Education-Basic Grants to States program.

 

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