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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Minneapolis Community College

Financial Audit

For the Three Years Ended June 30, 1994


Public Release Date: September 29, 1995 No. 95-40


Minneapolis Community College (college) became part of the new Minnesota State Colleges and Universities (MnSCU) System on July 1, 1995. Prior to the merger, the college was under the management and control of the Minnesota Community College System. Dr. Jacquelyn Belcher served as president of the college throughout the audit period until April 7, 1995. Mary Retterer served as interim president through September 1, 1995. The college finances its operations through student tuition and fees and systemwide appropriations. It also receives funding from the Minneapolis Community College Foundation (foundation), a separate, nonprofit organization.

Our audit scope covered the period from July 1, 1991 through June 30, 1994. In certain situations, we expanded the scope to include transactions through June 1995. We audited financial management and control, tuition and fees revenue, administrative expenditures, and bookstore operations. We also reviewed the college's relationship with the foundation and certain foundation disbursements.


During the time period of our audit, overall financial management and controls at the college were weak. The college has operated with a deficit since fiscal year 1993. A high turnover of staff in key financial management positions, spending decisions based on unrealistic assumptions on the collectibility of large accounts receivable balances, and poor cash management practices contributed to its financial management problems.

The college and the foundation did not have an appropriate relationship. During the audit period, a college dean served as the foundation executive director and received over $20,000 in reimbursements from the foundation. Many of the reimbursements were not well documented and some were inappropriate. Also, the executive director must repay $3,135 in overpayments. In addition, the foundation did not meet the state's requirements to operate as a charitable organization, did not always use its funds to benefit the college, and inappropriately acted as a fiscal agent for another nonprofit organization. The foundation's financial operations and relationship with the college need to be significantly improved.

We also noted other significant concerns with financial controls at the college. Weak controls over employee travel expenses resulted in $1,386 in overpayments to former president Jacquelyn Belcher. Inadequate controls over payroll allowed the payroll clerk to inappropriately manipulate her own leave records by 81.75 hours. We also noted control weaknesses over the college's receipt process.


Office of the Legislative Auditor, Room 140, 658 Cedar St., St. Paul, MN 55155 : or 651‑296‑4708