|Public Release Date: October 30, 1998
The 1941 Legislature created the Iron Range Resources and Rehabilitation Board (IRRRB) to develop the remaining resources of the taconite tax relief area of northeastern Minnesota. The tax relief area is an area which encompasses Minnesota's three iron ranges (Cuyuna, Mesabi, and Vermilion) and covers all or portions of Cook, Lake, St. Louis (excluding Duluth), Itasca, Aitkin, and Crow Wing counties. Jim Gustafson has served as the IRRRB commissioner since June 1992.
Our audit scope included the taconite tax receipts and the economic loan program for the period July 1, 1997, through June 30, 1998. Our scope also included Ironworld USA and Giants Ridge operations for the period July 1, 1995, through June 30, 1998. Our audit objectives included reviewing internal controls over financial activities and determining compliance with laws and regulations. This was not a complete audit of all Iron Range Resources and Rehabilitation Board programs.
IRRRB properly accounted for the receipt and deposit of taconite production taxes. IRRRB designed internal controls to provide reasonable assurance that loan receivable transactions for the Economic Loan Program were properly authorized and accurately recorded in the state's accounting records. However, IRRRB has been unable to reconcile their loan program to the state's accounting system.
IRRRB collected and appropriately deposited receipts generated from Giants Ridge and Ironworld USA operations. It also designed and implemented controls to provide reasonable assurance that it safeguarded Giants Ridge and Ironworld USA receipts and properly recorded them on the state's accounting system. IRRRB properly authorized Giants Ridge and Ironworld USA payroll and other administrative expenditures to ensure that they were made for a proper purpose and accurately recorded in the state's accounting system. IRRRB needs to ensure that Giants Ridge employees comply with statutory gift restrictions. IRRRB also needs to more closely monitor Ironworld USA's gift shop receipts.
IRRRB agreed with the findings and is taking corrective action to resolve the issues.