Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Finance

Statewide Audit - Selected Audit Areas
For the Year Ended June 30, 1998

 

Public Release Date: March 12, 1999 No. 99-18

Background Information

The Department of Finance maintains the state's accounting system and manages its accounting, budgetary, and debt management activities. It establishes policies and procedures to ensure consistent and reliable financial data and compliance with statutory provisions. The department is also responsible for the fairness, accuracy and completeness of the State of Minnesota's Comprehensive Annual Financial Report. Wayne Simoneau was commissioner during the time period covered by our audit. Pamela Wheelock became commissioner on February 10, 1999.

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. Our primary audit objective was to render an opinion on the State of Minnesota's financial statements. We also examined some administrative functions over federal funds performed by the department. Our scope within the Department of Finance included:

  • general obligation bond sales;
  • debt service transfers;
  • master lease program;
  • municipal energy loans;
  • appropriation transfers to the University of Minnesota;
  • federal cash management; and
  • statewide indirect costs.

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 Finance 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 Finance does business will be year 2000 ready.

For the areas audited, the Department of Finance'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. For the areas tested, the department complied, in all material respects, with the federal requirements relating to cash management and indirect costs, as described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement. However, the department needs to improve its oversight of agencies preparing financial statement data and its controls over the distribution of Invested Treasurers Cash earnings. The department also did not cancel outstanding warrants in accordance with statutory requirements.

In its response, the Department of Finance agreed with the report's findings and recommendations and is taking corrective actions to resolve the issues.

More Information

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