Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Department of Finance

 

Financial Audit Division Report 06-11 Released March 16, 2006

Key Conclusions:

  • Although we issued an unqualified audit opinion on the State of Minnesota's basic financial statements for the year ended June 30, 2005, we concluded there are weaknesses in the state's financial reporting process as described below.
Key Findings:
  • We proposed, and the Department of Finance made, numerous audit adjustments to the state's fiscal year 2005 preliminary financial statements. This demonstrates that there are weaknesses in the state's financial reporting process, which the department needs to resolve.
  • The Departments of Transportation and Finance did not properly account for reimbursements of construction project costs received from local units of government. This error resulted in a prior period adjustment of $37.8 million and an additional adjustment of $24.5 million to this year's financial statements.
  • The Department of Finance gave seven employees broad clearances to the state's main accounting system. The level of clearance resulted in incompatible access to the accounting system without mitigating controls.
  

Background Information:

The Department of Finance is responsible for preparing the state's basic financial statements. The department also has certain statewide financial management responsibilities relating to cash and debt management, payroll, and the administration of the state's accounting system.

The audit report contained three findings related to internal control over financial reporting and incompatible access to the state's accounting system.
More Information

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