Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Revenue

Programs Selected for
Fiscal Year 1998 Statewide Audit

 

Public Release Date: January 22, 1999 No. 99-4

Background Information

The Department of Revenue is responsible for managing the state's tax systems. Minnesota relies on the voluntary compliance of its citizens with those tax laws. The department works to win compliance through a balanced interaction of efforts that focuses on developing sound tax policies, educating citizens, providing expedient customer service, and providing administrative and enforcement services in the areas of tax collection and assessment. The department collected more than $10.2 billion in tax dollars during fiscal year 1998. In fiscal year 1998, the department operated under the direction of Mr. James Girard, Commissioner.

Selected Audit Areas and Conclusions

Our audit scope was limited to those areas material to the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 1998. Our primary objective was to render an opinion on the State of Minnesota's financial statements. As part of our work, we were required to gain an understanding of the internal control structure and ascertain whether the Department of Revenue complied with laws and regulations that may have a material effect on its financial statements.

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 issue. 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 Revenue 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 Revenue does business will be year 2000 ready.

For the areas audited, the Department of Revenue's financial activity for fiscal year 1998 was fairly presented in the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 1998. We remain concerned that the department is not verifying the withholding tax information obtained from employers to the wage detail information on file with the department.

The Department of Revenue agreed with the audit finding and is working towards its resolution.

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