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 12-03 Released February 16, 2012

Conclusion

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

Our audit report contains five findings related to internal controls over the preparation of the state’s financial statements. Four of the findings include concerns from our previous audit that have not been fully resolved.1

Findings

  • Prior Finding Partially Resolved: Several agencies lacked a comprehensive internal control structure over financial reporting to sufficiently mitigate the risk of potential misstatements in the financial statements. (Includes prior audit findings not resolved for five agencies.)
  • Prior Finding Partially Resolved: Several agencies allowed employees to have inappropriate access to state business systems or perform incompatible duties without establishing mitigating controls. (Includes prior audit findings not resolved for three agencies.)
  • Prior Finding Partially Resolved: The Department of Management and Budget and other state agencies did not have adequate internal controls to prevent and detect errors in the financial information used to compile the financial statements. (Includes prior audit findings not resolved for three agencies.)
  • Prior Finding Partially Resolved: The Department of Management and Budget had some inaccuracies in its draft footnote disclosures to the financial statements.
  • The Department of Revenue did not adequately perform reconciliations of its fuel tax collections or individual income tax refunds.

Audit Scope

We audited the state’s financial statements for the fiscal year ended June 30, 2011. Our audit encompassed many large state agencies that had financial activities significant to the financial statements.

Background

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. To prepare the statements, the department uses information from a variety of sources, including information provided by other agencies. The issues contained in this report relate to weaknesses in internal controls in the state’s financial reporting process as a whole.

 


1Office of the Legislative Auditor’s Financial Audit Division Report 11-02, Report on Internal Control Over Statewide Financial Reporting, issued February 18, 2011.

More Information

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