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Legislative Audit Commission

Minutes

June 18, 1998

The meeting of the Legislative Audit Commission was called to order by Senator Deanna Wiener on Thursday, June 18, 1998 at 10:10 a.m. in Room 112, State Capitol.

Members Present:

Representative Mindy Greiling Senator Bill Belanger
Representative Kris Hasskamp Senator David Knutson
Representative Mark Holsten Senator Keith Langseth
Representative Philip Krinkie Senator Pat Pariseau
Representative Dan McElroy Senator Deanna Wiener
Representative Mary Jo McGuire
Representative Ann H. Rest
Representative Kathy Tingelstad

Other Legislators Present:

Senator Don Betzold

Members Not Present:

Representative Lynda Boudreau Senator Sheila Kiscaden
Representative Edwina Garcia Senator James Metzen
Senator Thomas Neuville
Senator Ember Reichgott Junge
Senator Allan Spear

Senator Wiener recognized Claudia Gudvangen, Deputy Legislative Auditor for the Financial Audit Division. Ms. Gudvangen indicated that staff would present the findings in the most recent audit of the Minnesota Zoological Garden. She noted that this was a compliance audit; that the financial statements are audited by a CPA firm.

Ms. Gudvangen introduced Jeanine Leifeld, Manager of the audit of the Zoological Garden. Ms. Leifeld reviewed the background, audit scope and focus, and reviewed areas of concern found by the auditors. Ms. Leifeld answered questions from members concerning the negative unrestricted earnings and travel issues cited in the audit. Ms. Leifeld noted that there were no repeat findings from the audit conducted in 1993.

Senator Wiener recognized Jeff Higgins, Chief Financial Officer for the Zoo. Mr. Higgins noted that some of the reasons for the revenue shortfalls were the fact that state support has remained flat, but the zoo has experienced increased competition for entertainment spending. There had also been a couple of calamities at the zoo that lead to decreased attendance. He indicated that a planning group made up of legislators, representatives from the executive branch, the zoo foundation and the zoo board has been established to develop a strategy to put the zoo on a sound financial basis to bring to the Legislature. He reviewed actions taken by the Zoo to address the audit report findings. In response to a question concerning the landscaping in front of the entrance to the zoo, Mr. Higgins noted that this had been initiated by the county, but that the county has not made any efforts to maintain it. Representative McElroy asked that Mr. Higgins make copies of the CPA firm’s management letter available to commission members.

Senator Wiener recognized Roger Brooks, Deputy Legislative Auditor for the Program Evaluation Division. Mr. Brooks introduced staff who had worked on the evaluation of the Minnesota State High School League: Jo Vos, project manager, David Chein, Carrie Meyerhoff, and Stephen Coleman, evaluators. Mr. Brooks noted that the High School League is a private non-profit organization created by the school districts to govern school extra curricular activities, but that some organizational and oversight provisions exist in statute. A study had been conducted in 1987 and Mr. Brooks indicated that while progress had been made to address the concerns raised in that report, there still was a need for active oversight.

Ms. Vos reviewed the questions addressed in the study, research methods used, and changes since the last evaluation report was issued. She reviewed the areas of concern raised in the report and recommendations for change or improvement. There was considerable discussion on the role of the Department of Children, Families & Learning (CFL) as it relates to the High School League. Representative Hasskamp voiced concern about children traveling long distances for athletic activities on school nights and gender balance in coaching and referee positions. Ms. Vos noted this is an area that CFL should be more involved in.

In response to a question from Representative McGuire concerning oversight of financial policies, Mr. Nobles indicated that the League is audited by the State Auditor’s Office and that they look at compliance and reasonableness of expenditures. There was some discussion of the rule setting process and access to that process by the public.

Senator Wiener recognized Becky Montgomery, President of the High School League Board of Directors. Ms. Montgomery indicated that the Board is committed to working with the CFL and noted that they have established an ad hoc committee to review the League’s bylaws. She reviewed the fee structure and how that money is used, and answered questions from members.

Senator Wiener recognized John Hustad, Deputy Commissioner for the Department of Children, Families & Learning. Mr. Hustad indicated that the statute defining the department’s responsibility for review of the League are very limited and that the department is strictly adhering to the law. He indicated the department is waiting for specific legislation that would increase their level of review and oversight before taking action and noted that the recommendations contained in the report are outside the scope of current laws.

The meeting recessed at 12:25 p.m.

The meeting reconvened at 1:15 p.m.

Senator Wiener recognized Mr. Brooks for the purpose of reviewing the impact and utilization of reports produced by the Program Evaluation Division. Mr. Brooks indicated it was the division’s goal to produce reports that are useful to the Legislature and that the division strives to disseminate the information as widely as possible, but does not lobby to push any particular point of view or recommendation. He reviewed impact statements prepared by staff concerning the reports issued during the last legislative session.

There was considerable discussion about the topic selection process, as well as how to address studies that are mandated in legislation. Mr. Nobles suggested that a housekeeping bill again be introduced, noting that one of the major reasons it was vetoed last session was unequal representation by the parties on the commission, which has since been changed. Senator Wiener suggested the housekeeping bill also contain language preventing mandated studies.

Mr. Nobles noted he was not satisfied with the level of impact of last session’s studies and there was some discussion on how evaluation reports can be disseminated and used. Mr. Nobles cautioned that it is not the purpose of the office to promote a legislative agenda; it needs to remain non-political and objective in order to serve all legislators. Senator Wiener suggested that staff follow up with appropriate committee chairs and those who attended project roundtables by sending them the impact statements. She indicated she would send a memo to committee chairs, with copies to all committee members as well as roundtable attendees with the impact statement, offering a presentation by evaluation staff.

Representative Greiling expressed concern with the time of release of reports, noting that some are released too late for action in that session. Mr. Brooks indicated it was his goal to release this year’s studies early in January and suggested that the commission select several smaller studies in November that could be started in February. This will be discussed at the next meeting of the commission.

Representative McGuire noted that commission members had received a letter from Representative Skoglund concerning the legislation calling for a study of the cost of crime. Senator Wiener indicated this would be a very large study and that it could be included in the discussion in November. She indicated she would contact Representative Skoglund regarding his concerns and to discuss the need to narrow the focus of the proposed evaluation.

Senator Wiener recognized Mr. Nobles for a discussion of the process used in conducting the Statewide Audit. Mr. Nobles explained that the Statewide Audit is an audit of the state’s financial statements, and while it has a very limited audience, it is very necessary since it is used in establishing the state’s bond rating. He indicated that all audit staff are involved in that work and that it takes approximately six months to complete. Audit Division management are looking at ways they can narrow the focus of the Statewide Audit in order to have more time available to do agency audits. Ms. Gudvangen indicated that though the state has a biennial budget, federal rules require the Statewide Audit be conducted annually. She indicated some changes are being implemented now and will make a presentation at a future meeting of others that may be needed.

The meeting adjourned at 3:10 p.m.

_____________________________________
Senator Deanna Wiener, Chair

_____________________________________
Jean Barnhill, Recording Secretary

 

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