Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Statewide Report on Internal Control Over Financial Reporting

 

Financial Audit Division Report 07-04 Released March 22, 2007

Key Conclusions:

  • The state’s financial statements for fiscal year 2006 were fairly stated in all material respects.  However, the state had some weaknesses in internal control over financial reporting as noted below.

Findings:

  • The Department of Finance did not sufficiently mitigate the risk of potential misstatements in the state’s financial statements caused by the lack of complete information in the state’s accounting system, the state’s decentralized accounting environment, and personnel turnover in financial reporting positions.

  • Finance did not accurately account for certain balances in the preliminary financial statements.

  • The capital asset balances determined by the departments of Transportation and Finance required $29 million in audit adjustments.

  • Several state agencies provided incomplete or inaccurate information to the Finance for financial reporting, including Natural Resources, Revenue, Employment and Economic Development, and Human Services.

The audit report contained nine findings relating to internal control weaknesses.
   Audit Scope:

We audited the state’s financial statements for the year ended June 30, 2006.  Our audit encompassed work at many of the larger state agencies that managed financial activities that were significant to the state’s financial statements.


Background:

The Department of Finance is responsible for preparing the state’s annual financial statements.  Each year the financial statements are included in the Comprehensive Annual Financial Report published by the department. 

In developing this report, we applied criteria included in the recently issued Statement on Auditing Standards #112, Communicating Internal Control Related Matters Identified in an Audit, for assessing the sufficiency of internal controls over financial reporting.  As a result, the issues included in this report relate to internal controls in the state’s financial reporting process as a whole and not just to those that exist at the Department of Finance.

     
More Information

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