Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Minnesota Historical Society
Arts and Cultural Heritage Fund Expenditures
Internal Controls and Compliance Audit

 

Financial Audit Division Report 15-12 Released September 1, 2015

Background

The Office of the Legislative Auditor conducted this audit to determine whether the Minnesota Historical Society had adequate internal controls over its grant programs and complied with applicable legal requirements when spending money from the Arts and Cultural Heritage Fund. We audited the society’s expenditures from the Arts and Cultural Heritage Fund from July 1, 2012, through February 28, 2015.

The Arts and Cultural Heritage Fund is one of the four funds created when voters approved the “Legacy Amendment” to the Minnesota Constitution in 2008. The amendment increased the state’s sales tax by three-eighths of 1 percent for 25 years and dedicated 19.75 percent of the additional revenue to the Arts and Cultural Heritage Fund.

For fiscal years 2013, 2014, and 2015, the Legislature appropriated over $40 million from the Arts and Cultural Heritage Fund to the Minnesota Historical Society. As of February 28, 2015, the society had spent about $35.3 million from these appropriations ($13.7 million in Historic and Cultural Grants and Civics Education Grants to other organizations and $21.6 million for various other programs, exhibits, and other expenses).

Conclusion

For its Historic and Cultural Grant expenditures, the Minnesota Historical Society had adequate internal controls and complied with applicable legal requirements. While the society effectively monitored its Historic and Cultural Grants, it did not sufficiently monitor the recipient’s use of Civics Education Grant money. For the nongrant Arts and Cultural Heritage Fund expenditures we tested, the society generally complied with applicable legal requirements. However, the society did not ensure that its cost allocation methodology for indirect administrative costs complied with the Arts and Cultural Heritage Fund appropriation laws.

The society resolved a prior audit finding related to compliance with its internal Historic and Cultural Grant manual. 1

Findings

  • The Minnesota Historical Society did not sufficiently monitor how Civics Education Grant recipients used the Arts and Cultural Heritage grant money they received from the society.
  • The Minnesota Historical Society used a methodology for allocating indirect administrative costs to the Arts and Cultural Heritage Fund that did not comply with the requirement that all costs allocated to the fund must be “directly related to and necessary for” specific projects or activities listed in its appropriation law.

 


1 Office of the Legislative Auditor’s Financial Audit Division Report 12-20, Minnesota Historical Society, Finding 1, issued October 4, 2012.

More Information

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