Minnesota Office of the Legislative Auditor
The auditor of Minnesota state government


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Legislative Audit Commission


October 31, 2007

Members Present:

Representative Michael Beard Senator Don Betzold
Representative Sondra Erickson Senator David Hann
Representative Rick Hansen Senator James Metzen
Representative Aaron Peterson Senator Ann Rest
Representative Connie Ruth Senator Claire Robling
Representative Steve Simon

Members Absent:

Senator Thomas Neuville

The Legislative Audit Commission meeting was called to order by Representative Rick Hansen, Chair, at 2:00 p.m.  The purpose of the meeting was to approve the reappointments of the Legislative Auditor and Deputy Legislative Auditor.

Senator Robling gave a report on the Subcommittee meeting.  The recommendation was to reappoint Mr. Nobles as the Legislative Auditor and Ms. Ferkul as the Deputy Legislative Auditor.  She mentioned that Mr. Nobles said he had been appointed for four terms now and that he had recapped several of their reports to the subcommittee.

Senator Robling moved to approve the recommendations of the subcommittee to reappoint Mr. Nobles and Ms. Ferkul to their current positions as Legislative Auditor and Deputy Legislative Auditor, respectively.  Representative Peterson seconded the motion.

Representative Hansen requested both Mr. Nobles and Ms. Ferkul to give a little background on themselves to the full commission.  Mr. Nobles gave a little history of himself.  He also expressed that his job is to be a leader of a team.  Ms. Ferkul said that it has been her pleasure to serve as the Deputy Legislative Auditor over the past few years.  She then gave a brief summary of her history with the OLA and discussed the audit staff that work for the Financial Audit Division.

In response to a question from Representative Hansen, Mr. Nobles discussed the ever prominent problem the OLA has with turnover and low salaries.  Senator Metzen made the suggestion of having a reviewer come in and evaluate the office’s salaries to see if they are low in comparison to the standards.

Representative Hansen reminded the members about the motion on the table.  A voice vote was taken, the motion prevailed, and the appointments were confirmed.

Mr. Nobles mentioned that the evaluation, Misclassification of Employees as Independent Contractors, will be released at the end of November and at a commission meeting.  Mr. Nobles then outlined the tentative dates of release for the rest of the program evaluations.  He also reminded the commission about the delay in release of the CharterSchools and Oversight of Workers’ Compensation evaluations due to the follow-up review of the State Highways and Bridges report.

Mr. Nobles mentioned that he has been receiving many topics for the next round of evaluations.  Representative Hansen suggested that since the OLA is already receiving a large number of suggestions, the Topic Selection Subcommittee should start receiving those so they could begin reviewing them and maybe get the process started a little earlier than the year before.

The meeting then turned to Ms. Ferkul and her presentation of the Financial Audit Division.  Ms. Ferkul discussed the division’s main audit focus for 2007 and the most common audit issues.  She gave several examples of audit findings and weaknesses from several audit reports the division had done this past year.  Ms. Ferkul discussed the most recent MnSCU audit in more detail.  She explained that 24 findings were reported in the MnSCU audit, including issues with tuition and fees, personnel/payroll, operating expenses, and an issue with Pine Technical College’s Employment and Training Center.

Ms. Ferkul introduced John Asmussen, Executive Director, MnSCU Internal Audit, to respond to the findings of the OLA report.  Mr. Asmussen said that MnSCU agrees with all 24 findings in the report.  He expressed that they are not happy about them, but they appreciate the work of the OLA and welcome the findings.  He explained that they rate the findings based on criticality and they found 3 out of the 24 as critical and needed immediate attention.  The other findings they view as opportunities to make the processes better.

Mr. Nobles mentioned that the Financial Audit Division has jurisdiction over about 160 different organizations, from the big state agencies to all the boards and commissions and even some of the quasi-governmental organizations, as well as three metropolitan agencies.  Since the OLA cannot audit all of these every year, the office goes through a risk assessment process to determine where to deploy their audit resources.  He said the Financial Audit Division does not conduct a process comparable to the topic selection process done by the Program Evaluation Division for determining which agencies to audit and he doesn’t recommend doing that for these audits.  However, the office is open to suggestions and often receives allegations or concerns from legislators or the public that the office follows up on.  Some of these ultimately lead to full investigations.  Mr. Nobles also pointed out that all work being done by either division can be viewed on the OLA web site.

Representative Hansen congratulated Mr. Nobles and Ms. Ferkul on their appointments.  He also suggested the last Wednesday in November at 2:00 for the next LAC meeting.  Mr. Nobles confirmed that date was November 28 and that the OLA would set the meeting up. 

With no further business, Representative Hansen adjourned the meeting at 3:16 p.m.

Representative Rick Hansen, Chair

Shelly Watterud, Recording Secretary



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