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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Minnesota State Colleges and Universities System

Selected Material Financial Statement Components
and Federal Financial Assistance Programs Fiscal Year 1997


Public Release Date: March 13, 1998 No. 98-16

Background Information

The Minnesota State Colleges and Universities System (MnSCU) consists of 36 colleges and universities with 53 campuses located throughout Minnesota. The system includes state universities, community colleges, and technical colleges. A 15-member board of trustees, appointed by the Governor, oversees the activities of MnSCU. Morris J. Anderson replaced Dr. Judith Eaton as the MnSCU chancellor effective July 7, 1997.

Scope and Objectives

The primary objectives of our audit were to determine if the state's financial statements were materially correct for the areas included in our financial audit scope, to gain an understanding of the internal control structure, and to determine compliance with material legal provisions, including federal regulations. The financial audit scope included the following areas: tuition and fees; construction expenditures for specific projects; revenues and expenditures for federal student financial aid; and material revenue, expenditure, and asset balances in the MnSCU Enterprise Activities, Supplemental Retirement, Agency, and Gift Funds, as applicable.

In addition, we audited the following programs administered by MnSCU for compliance with federal requirements for fiscal year 1997: Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Family Education Loans (FFEL), Federal Work Study (FWS), Perkins Loans, Pell Grants, Nursing Grants, and the Carl D. Perkins Vocational Education Basic Grant program.


MnSCU financial activities included in our audit scope were fairly presented in the state of Minnesota's fiscal year 1997 Comprehensive Annual Financial Report in accordance with generally accepted accounting principles. MnSCU continued to experience significant problems, however, in obtaining reliable financial information which impacted its ability to prepare timely and complete financial statements.

MnSCU also administered material federal programs in compliance with federal requirements, except that we noted overawards in the student financial assistance programs totaling $6,429. We also noted a questionable cost of attendance budget adjustment that could potentially result in another overpayment of $2,824. The college increased financial aid for one student for international travel to check on the welfare of the student's child. In addition, we found internal control weaknesses related to the administration of federal work study at 4 of 24 colleges tested.

MnSCU Response

MnSCU agreed with the findings and recommendations in the audit report, except for the finding on one college's questionable use of professional judgment. MnSCU submitted a corrective action plan for the other findings and recommendations contained in the report. Some of the findings have been resolved.


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