Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Veterans Affairs
Minnesota Veterans Home at Minneapolis
Internal Control and Compliance Audit

 

Financial Audit Division Report 10-33

Released October 14, 2010

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Conclusion

The Department of Veterans Affairs’ Minnesota Veterans Home at Minneapolis generally had adequate internal controls to ensure that it safeguarded its financial resources, accurately paid employees and vendors in accordance with management’s authorizations, complied with finance-related legal provisions, and created reliable financial data. Since our last audit in November 2008, the home has improved its internal controls. In particular, the home made significant improvements to control its largest expenditure, payroll, and reduce the amount of overtime paid to employees. However, the home continued to have weaknesses in some fundamental financial control processes. There is a substantial risk that the home may not be able to sustain the improvements it has made unless it is able to maintain consistent administrative leadership and its business office is fully staffed with knowledgeable, experienced personnel.

For the items tested, the home generally complied with financial-related legal requirements. However, the home had noncompliance with certain finance-related legal requirements.

The home made significant progress to resolve the prior audit findings. It fully resolved 7 and partially resolved 8 of the 18 prior audit findings. However, it continued to have weaknesses in some areas.

Key Findings

• Prior Finding Not Resolved: The Minnesota Veterans Home at Minneapolis did not adequately assess its business risks or monitor the effectiveness of its internal controls over its key financial activities.
• The home did not adequately separate duties in certain functions.
• Prior Finding Partially Resolved: The home did not adequately restrict employees’ access to the accounting systems.
• Prior Finding Partially Resolved: The home did not successfully reconcile its internal accounting systems to the state’s accounting system.
• The home charged some residents incorrect maintenance fees.
• Prior Finding Not Resolved: The home did not accurately calculate the annual cost of care rate for fiscal years 2008 and 2009.
• The home did not adequately follow up on outstanding accounts receivable balances.
• The home paid some employees the wrong amounts.

Audit Objectives and Scope

The objective of this audit was to examine internal controls and compliance for resident cost of care, resident accounts, gifts and donations, payroll, and other administrative expenditures and fixed assets for the period July 1, 2007, through April 30, 2010, and to determine whether the home adequately resolved the prior audit findings and recommendations. ¹

 

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¹Office of the Legislative Auditor, Financial Audit Division, Report 08-32, Minnesota Veterans Home at Minneapolis, issued November 26, 2008.