Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Report on Internal Control Over
Statewide Financial Reporting

 

Financial Audit Division Report 09-03 Released February 13, 2009

Conclusion

The state’s financial statements were fairly stated in all material respects. However, the state continued to have weaknesses in internal control over financial reporting as noted below.

The audit report contains seven findings related to controls over the preparation of the state’s financial statements. Three of the findings related to prior audit recommendations that have not been fully resolved.

Findings

The state lacked a comprehensive internal control structure over financial reporting to sufficiently mitigate the risk of potential misstatements in the financial statements.

Many state agencies continued to allow employees to have inappropriate access to state business systems or perform incompatible duties without establishing mitigating controls.

The Department of Employment and Economic Development lacked effective controls over accounts receivable and accounts payable calculations that resulted in material misstatements in the Unemployment Insurance Fund’s preliminary financial statements.

The Department of Human Services did not have an effective process to ensure that one of its major program subsystems reconciled to the state’s accounting system.

Several state agencies need to improve controls over financial reporting including: Finance, Transportation, and Education.

Audit Scope

We audited the state’s financial statements for the year ended June 30, 2008. Our audit encompassed work at many large state agencies that managed financial activities that were significant to these financial reports.

Background

The Department of Finance is responsible for preparing the state’s annual financial statements, which are included in the State of Minnesota’s Comprehensive Annual Financial Report.

The issues contained in this report relate to internal controls in the state’s financial reporting process as a whole.

More Information

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