Report on Internal Control Over
Statewide Financial Reporting
Financial Audit Division Report 10-05
Released February 11, 2010
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 five findings related to controls over the preparation of the state’s financial statements. Three of the findings include prior audit findings that had not been fully resolved.1
- Prior Finding Partially Resolved: The state lacked a comprehensive internal control structure over financial reporting to sufficiently mitigate the risk of potential misstatements in the financial statements.
- Prior Finding Partially Resolved: 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 Management and Budget and other state agencies did not have adequate controls to prevent and detect errors in the financial information used to compile the financial statements. (Also includes one prior audit finding not resolved.)
- The Department of Management and Budget did not always prepare accurate footnote disclosures to the financial statements.
- Some agencies did not reconcile their subsystem data to the state’s accounting system to ensure accurate financial information.
We audited the state’s financial statements for the year ended June 30, 2009. Our audit encompassed work at many large state agencies that managed financial activities that were significant to these financial reports.
The Department of Management and Budget 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.
Office of the Legislative Auditor’s Financial Audit Division Report 09-03, Report on Internal Control Over Statewide Financial Reporting
, issued February 13, 2009.