|Public Release Date: March 6, 1998
The Department of Finance manages the state's accounting, budgetary, and debt management activities. The department maintains the state's accounting system and monitors controls to prevent unauthorized transactions. The Commissioner of Finance, appointed by the Governor, directs the department's operations. Wayne Simoneau was appointed commissioner in October 1996.
Our work in the Department of Finance is completed as part of our annual Statewide Audit. The primary objective of the Statewide Audit is to render an opinion on the state of Minnesota's financial statements included in its Comprehensive Annual Financial Report for fiscal year 1997. This objective included determining whether the financial statements presented fairly its financial position, results of operations, and changes in cash flows in conformity with generally accepted accounting principles. The Statewide Audit is also designed to meet the requirements of the Single Audit Act of 1984, relating to federal programs.
As part of our work, we gained an understanding of internal controls and determined whether the Department of Finance complied with laws and regulations that may have a material effect on the state's financial statements. Our audit scope focused on the Department of Finance's financial reporting responsibilities and on the following areas that were material to our Statewide Audit objectives in fiscal year 1997: general obligation bond sales, debt service transfers, master lease program, school energy loans, appropriation transfers to the University of Minnesota, federal cash management, and statewide indirect costs.
We issued an unqualified opinion on the state's financial statements for fiscal year 1997. However, we concluded that the department should make various changes in its procedures to improve the external financial reporting process. This includes working with other state agencies to ensure that they understand applicable accounting principles and how to obtain accurate information for financial statement preparation. We also found that the department did not cancel outstanding warrants in accordance with statutory requirements. We also concluded that, for the items tested, the department complied with applicable legal requirements governing general obligation bond sales, debt service transfers, the master lease program, transfers to the University of Minnesota, federal cash management, and statewide indirect costs.
The department agreed with the audit report's findings and recommendations and is taking action to resolve the issues.