|Public Release Date: January 22, 1999||No. 99-3|
The Department of Labor and Industry is responsible for processing and paying workers' compensation claims resulting from supplemental benefits, second injury responsibilities, and uninsured employers. The claims are paid from the Special Compensation Fund, which is financed from assessments made on employers. The department also collects receipts for various purposes and activities, such as issuing licenses and penalties. Ms. Gretchen Maglich was commissioner of Labor and Industry from December 1997 to December 1998. Mr. Michael Houliston was appointed acting commissioner effective January 4, 1999.
Our audit scope was limited to the financial activities within the Department of Labor and Industry that were material to the State of Minnesota's Comprehensive Annual Financial Report for the fiscal year ended June 30, 1998. Our scope included Special Compensation Fund assessments and claims expenditures. We also examined the estimated liability for future claims reported in the general long-term obligation account group.
We qualified our report, dated December 1, 1998, on the State of Minnesota's Comprehensive Annual Financial Report because insufficient audit evidence exists to support the State of Minnesota's disclosures with respect to the year 2000. Auditing the state's year 2000 compliance efforts was not an objective of this audit. As a result, we do not provide assurance that the Department of Labor and Industry is or will be year 2000 ready, that its year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Department of Labor and Industry does business will be year 2000 ready.
For the areas audited, the Department of Labor and Industry's financial activities were fairly presented in the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 1998. As a result of our procedures, we identified no weaknesses in internal control or instances of noncompliance with finance-related legal provisions, for the items tested.