Skip to main content Skip to office menu Skip to footer
3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
MnSCU System Office

Financial Audit For the
Period July 1, 1995, through June 30, 1998


Public Release Date: August 5, 1999 No. 99-42


The Minnesota State Colleges and Universities System (MnSCU) began operations on July 1, 1995. The Legislature merged state universities, community colleges, and technical colleges into one system. The MnSCU Board of Trustees established a system office to provide administrative and functional support to the 36 colleges and universities.

Our audit scope included a review of the system office financial management, payroll expenditures, consultant contract expenditures, other administrative expenditures, and the financial management of Minnesota State University-Akita for the period July 1, 1995, through June 30, 1998.


MnSCU's system office operated within its available resources and had an effective process to monitor revenue and expenditure budgets. The system office had adequate controls in place to provide reasonable assurance that financial activities were properly recorded on MnSCU accounting and MAPS. However, the system office did not have adequate controls over access to its computerized business systems.

We concluded that the system office had effective controls to ensure that its payroll, consultant contracts, and administrative expenditures were authorized and accurately recorded in the accounting systems. We found, however, that the system office did not independently verify that the payroll clerk properly input payroll hours. In addition, the system office did not comply with applicable contracting laws and internal procedures when awarding three Minnesota Satellite and Technology (MnSAT) contracts. The system office also did not have adequate controls over fixed assets.

While we concluded that MnSCU complied with the provisions of the contract for Minnesota State University-Akita, we noted that concerns relating to the educational and financial operation of that campus exist. MnSCU continues to provide large financial subsidies to operate this campus. American and Japanese student enrollment goals have not been met. The cost per student is significantly higher than other MnSCU universities, and MnSCU's proportionate share of funding has increased. A MnSCU work group is in the process of analyzing the educational and financial management issues associated with Minnesota State University-Akita. MnSCU has to determine whether the educational benefits justify the costs of operating this campus and if changes to the financial arrangements need to be made.

The system office agreed with the findings and recommendations contained in the audit report. The system office has developed a corrective action plan that includes assigning responsibility to system office personnel for ensuring that the recommendations will be implemented.

More Information

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