Office of the Legislative Auditor - Financial Audit Division

Overall Conclusions:

The Department of Labor and Industry’s internal controls over payroll and other administrative expenditures were adequate, and for the items tested, the department complied with finance-related legal provisions.

However, we identified two internal control weaknesses as discussed below.

Findings:

• The department provided incompatible accounting system access to five employees who, as a result, could both initiate purchases and process payments.
• The department did not effectively monitor unpaid penalties nor control reductions of certain penalties assessed to employers for failure to carry workers’ compensation insurance.

Audit Scope:

Audit Period:
July 1, 2000, to June 30, 2004

• Payroll expenditures
• Administrative expenditures
• Penalties for failure to carry workers’ compensation insurance

The Department of Labor and Industry ensures a safe and equitable work environment for Minnesota employees and employers.

In fiscal year 2004, the department collected $124 million and spent $111 million, mostly for the financing of the Special Workers’ Compensation Fund.