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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Minnesota Supercomputer Center, Inc.

Financial Audit

For the Two Years Ended June 30, 1993


Public Release Date: June 22, 1994 No. 94-32


The University of Minnesota created Minnesota Supercomputer Center, Inc. (MSCI) in 1982. The University and the University of Minnesota Foundation own 10 percent and 90 percent of MSCI's common stock, respectively. The University established MSCI to obtain affordable access to state-of the art supercomputing services.

Audit Areas

Computer Use Revenue

Minnesota Supercomputer Center, Inc. has a complex billing and collection process that helps maximize commercial revenues. MSCI has adequate controls over its billing and receipt processing functions. However, management could improve its process for accumulating resource data with additional accounting controls.

Employee Compensation

MSCI compensation levels are reasonable in comparison with industry averages which are based primarily on the private sector. MSCI does not provide employees with significant types of non-cash compensation or "perks." A portion of most employees' compensation includes incentive payments, which are dependent on the corporation's financial status and individual performance. We think controls over incentive payments should be improved by a formal board policy limiting the amount of such payments and annual reporting of the amounts paid.

Other Areas

In reviewing three selected other areas, we found that MSCI was making limited purchases from the University, and was appropriately paying sales tax on its purchases. In addition, MSCI made board member director fee payments only to its external board members. Finally, MSCI had established appropriate travel reimbursement practices.