Overall Conclusion
Except as noted below, for the selected areas audited, the Minnesota Housing Finance Agency properly safeguarded its assets and reasonably and prudently administered its financial activities. The Minnesota Housing Finance Agency's internal controls provided reasonable assurance that it administered its appropriations and administrative expenditures in compliance with applicable legal provisions and management's authorization. For the items tested, the agency complied with the significant legal provisions concerning state appropriations and administrative expenditures.
Current Findings and Recommendations
The agency did not protect the state's interests when it paid consulting firms to release employees from non-compete clauses. The agency paid $61,000 to obtain the release of two employees from non-compete clauses with their former employers. The agency believed that the overall benefit of having in-house information technology staff and the long-term savings from reduced consulting costs outweighed the additional hiring costs resulting from the non-compete clause releases. We recommended steps the agency could take to ensure that the state's interests are better protected.
The agency did not adequately monitor employees' access to the state's personnel/payroll system. A financial analyst, who did not have personnel or payroll responsibilities, had inappropriate access to update business expenses, adjust payroll data, and process retroactive payments. We recommended that the agency periodically review system access to ensure that it limits employees' access to the levels needed to perform their job responsibilities.
Agency Background
In 1971 the state legislature created the Minnesota Housing Finance Agency (the agency) to increase the ability of low and moderate income Minnesotans to obtain safe, decent housing. Since that time, the agency has allocated funds to assist in the purchase, rehabilitation, and rental of housing by qualifying individuals. Minnesota Statutes, Chapter 462A, defines the agency's duties and responsibilities.
Financial-Related Audit Reports address internal control weaknesses and noncompliance issues noted during our audits of state departments and agencies. The scope of our audit work at the Minnesota Housing Finance Agency included state appropriations, the Affordable Rental Investment Fund and Economic and Housing Challenge Fund programs, payroll, and other administrative expenses.
