Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Revenue

Financial Audit For the Time Period
July 1, 1996, through March 31, 1999

 

Public Release Date: October 7, 1999 No. 99-57

Agency Background

The Department of Revenue is responsible for managing the state's tax systems. During fiscal years 1997 and 1998 the department operated under the direction of Commissioner James Girard. He resigned in December 1998 and Matthew Smith became acting commissioner until January 20, 1999, when Governor Ventura appointed him as commissioner of Revenue.

The department collects approximately $11 billion a year through various tax types. We audit the largest of these revenue programs annually as part of our Statewide Audit. In order to fund these activities, the Legislature appropriates monies to the department to fund its administrative operations.

Audit Scope and Conclusions

The scope of this audit included a review of payroll, professional/technical services, computer and system services, rent, supplies and equipment, and the Minnesota Collection Enterprise (MCE) for the period from July 1, 1996, through March 31, 1999.

The Department of Revenue designed and implemented internal controls to provide reasonable assurance that MCE transactions were adequately documented, approved, accurately recorded on the state's accounting system, and in compliance with applicable legal provisions and management's authorizations. However, the department did not reconcile the transactions recorded on its collections system to the Minnesota Accounting and Procurement System (MAPS), or transfer collection fees to the General Fund in a timely manner.

The department's payroll transactions were adequately supported, approved, and accurately reported in the state's accounting records. In addition, for the items tested, the department processed its payroll transactions in compliance with material finance-related legal provisions and applicable bargaining unit agreements. The department also appropriately authorized and accurately paid and recorded expenditures for professional/technical services, computer and system services, rent, and supplies and equipment. The department also properly executed contracts with outside vendors in accordance with state requirements and procedures. The department also properly recorded its fixed assets on its fixed asset system. In addition, for the items tested, the department complied with applicable finance-related legal provisions.

In its audit response, the Department of Revenue agreed with the audit findings and is taking corrective action to resolve the issues.

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