Minnesota Office of the Legislative Auditor
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Report Summary
Department of Transportation

Statewide Audit Selected Programs
Fiscal Year Ended June 30, 1998

 

Public Release Date: March 5, 1999 No. 99-14

Agency Background

The Department of Transportation (MnDOT) is responsible for providing a balanced transportation system in Minnesota. The system includes aeronautics, highways, motor carriers, ports, public transit, railroads, and pipelines. The department's activities are funded primarily from Trunk Highway Fund appropriations, federal grants, and bond proceeds. Department expenditures for fiscal year 1998 totaled approximately $1.4 billion. Mr. James N. Denn was the commissioner of the department during our audit scope. In January 1999, the Governor appointed Mr. Elwyn Tinklenberg as the new commissioner.

Selected Audit Areas and Conclusions

Our audit scope was limited to those activities material to the State of Minnesota's general purpose financial statements for the year ended June 30, 1998, and to the Single Audit objectives. Our primary audit objective was to render an opinion on the State of Minnesota's financial statements. Our scope within the Department of Transportation included the Highway Planning and Construction Program (CFDA 20.205), the Airport Improvement Program (CFDA 20.106), County State-Aid Highway Fund grants, Municipal State-Aid-Street Fund grants, and bridge construction.

We qualified our report dated December 1, 1998, on the State of Minnesota's general purpose financial statements 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 Transportation 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 Transportation does business will be year 2000 ready.

For the areas audited, the Department of Transportation's financial activities were fairly presented in the general purpose financial statements of the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 1998. We, along with the MnDOT Internal Audit Section, noted the following reportable conditions involving internal control over compliance related to the Highway Planning, Research, and Construction Program and the Airport Improvement Program. The department did not complete supplemental agreements for some construction projects prior to starting the additional work. The department did not properly monitor compliance with the Davis-Bacon Act or with specifications for product material testing.

The Department of Transportation agrees with our report conclusions. The department is working with the various divisions to resolve the audit issues.

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