| Public Release Date: March 5, 1999 | No. 99-13 |
The Department of Children, Families & Learning is responsible for providing educational assistance to school districts and local educational agencies. In addition, the department provides programs that address social and economic concerns, such as the Head Start Program and energy, health, and nutrition programs. The department is funded primarily from General Fund appropriations and federal grants. Department expenditures for fiscal year 1998 totaled approximately $4 billion. Mr. Robert Wedl was the commissioner of the department during our audit scope. In January 1999, the Governor appointed Ms. Christine Jax as the new commissioner.
Our audit scope was limited to those activities material to the State of Minnesota's general purpose financial statements for the year ended June 30, 1998, and to the federal Single Audit objectives. Our primary audit objective was to render an opinion on the State of Minnesota's financial statements. Our scope within the Department of Children, Families & Learning included General Fund School Aids, Maximum Effort School Loans, and Endowment School Apportionment Aids. Federal programs included Title I Grants to Local Educational Agencies, Special Education State Grants, Child and Adult Care Food, Low Income Home Energy Assistance, Child Care and Development, and Adult Education State Grants.
We qualified our report, dated December 1, 1998, on the State of Minnesota's financial statements because insufficient audit evidence exists to support the State of Minnesota's disclosures with respect to the year 2000. Auditing the state's year 2000 compliance efforts was not an objective of this audit. As a result, we do not provide assurance that the Department of Children, Families & Learning is or will be year 2000 ready, that its year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Department of Children, Families & Learning does business will be year 2000 ready.
For the areas audited, the Department of Children, Families & Learning's financial activities were fairly presented in the general purpose financial statements of the State of Minnesota for the year ended June 30, 1998. However, we did identify two concerns relating to financial reporting. The department did not certify some liabilities to the Department of Finance. In addition, the department did not prepare supplemental federal expenditure schedules accurately and timely. For the federal programs tested, the department complied, in all material respects, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 1998. However, we identified certain weaknesses in internal control and noncompliance with program requirements. For the Low Income Home Energy Assistance Program, we identified concerns relating to the refund process, the Cash Management Improvement Act, recording of grant amounts, and monitoring of subrecipients. We also found that the department did not accurately prepare a quarterly report for the Child Care and Development Program and did not review the manual entries of county expenditures for the program. Finally, the department did not monitor Adult Education subgrantee administrative expenditures.
The Department of Children, Families & Learning agreed with the report conclusions. The department has started corrective action to resolve several of the audit issues.
