|Public Release Date: February 18, 1999||No. 99-10|
The Minnesota State Retirement System (MSRS) administers retirement programs for state employees, correctional employees, unclassified employees, state troopers, legislators, elected state officers, and judges. The system provides income for covered employees or their beneficiaries upon retirement, disability, or death. MSRS also administers a deferred compensation plan available to all Minnesota public employees and officials. MSRS's assets at June 30, 1998, totaled nearly $9 billion.
The primary objective of our audit was to render an opinion on the Minnesota State Retirement System's financial statements. These statements are included both in MSRS's and in the State of Minnesota's Comprehensive Annual Financial Reports for fiscal year 1998. This objective included whether the financial statements presented fairly its financial position, results of operations, and changes in cash flows in conformity with generally accepted accounting principles. As part of our work, we were required to gain an understanding of MSRS's internal control structure over contributions, benefits, refunds, and the financial statement preparation cycle. We also determined whether MSRS complied with laws and regulations that may have a material effect on its financial statements.
MSRS's Comprehensive Annual Financial Report for the year ended June 30, 1998, includes our audit opinion dated December 1, 1998. We qualified our report because sufficient audit evidence did not exist to verify MSRS's disclosures about the year 2000. Auditing MSRS's year 2000 compliance efforts was not an objective of this audit. As a result, we do not provide assurance that MSRS 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 MSRS does business will be year 2000 ready. MSRS designed internal controls to provide reasonable assurance that it properly administered its material financial activities, except, as noted in the following findings. Finding 1 explains that MSRS did not meet the Department of Finance's reporting deadline and submitted draft financial statements that required significant adjustments. Finding 2 discusses reconciliations that MSRS did not perform to ensure the integrity of data on its general ledger, its subsystems, and the state's accounting system.
MSRS agreed with our recommendations and wll take the necessary corrective action.