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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary

Management Letter

Minnesota State Colleges and Universities

Fiscal Year Ended June 30, 2000

Key Findings and Recommendations:

  • We issued a qualified audit opinion on the Minnesota State Colleges and Universities (MnSCU) Combined Balance Sheet as of June 30, 2000. The potential existed for liabilities on the balance sheet to be understated by $7 million for goods and services received by June 30 for which payment had not been made. MnSCU financial statements also did not adequately disclose significant violations during the year of statutory requirements for collateralizing bank deposits. Undercollateralized bank balances during the year ranged from approximately $1 million to $3.4 million for up to one week or more in duration at several colleges and universities.
  • Inadequate internal controls over financial reporting could result in material misstatements in the financial statements for fixed assets, state appropriation cash balances, and interfund activities. MnSCU had to adjust the fixed assets reported on the financial statements by $38 million based on additional information not appropriately recorded in the accounting system. In addition, MnSCU did not identify that the Department of Finance had not transferred appropriation cash balances of over $50 million to the MnSCU General Fund. Finally, MnSCU had to perform additional detailed analysis and adjustments to properly report interfund transactions in the financial statements.
  • We identified student financial aid overpayments totaling $88,607 to 25 students. We also reported concerns over internal controls over financial aid at Metropolitan State University, Minnesota State University, Mankato, and Northwest Technical College related to the overpayments.

Management letters address internal control weaknesses and noncompliance issues found during our annual audit of the state's financial statements and federally funded programs. The scope of work in individual agencies is limited. During the fiscal year 2000 audit, our audit scope was limited to those MnSCU activities material to the State of Minnesota's Comprehensive Annual Financial Report and the MnSCU Combined Balance Sheet.

Our 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, and Agency Funds. Selected activities were also reviewed in the MnSCU General, Special Revenue and Debt Service Funds. In addition, we reviewed the audit of the MnSCU Revenue Bond Fund financial statements which is performed by a certified public accounting firm.

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