Office of the Legislative Auditor - Financial Audit Division

Report Summary

Department of Human Services

Fiscal Year Ended June 30, 2001

The Department of Human Services' internal controls provided reasonable assurance that it accurately recorded financial activity for the department's payroll, rent, professional services contracts, employee travel expense reimbursements, and licensing revenue in the state's accounting and payroll systems.

Key Findings and Recommendations

• The department did not independently verify payroll transactions entered into the payroll system. We recommended that the department develop procedures to independently verify payroll transactions processed in the state's payroll system.
• The department did not conduct site visits to licensees on a timely basis, as required by state statutes. We recommended that the department's licensing division perform monitoring in accordance with established guidelines and legal requirements.

Agency Background

The Department of Human Services (DHS) helps people, including families, children, and senior citizens, meet their basic needs. The department works in conjunction with employees from Minnesota's 87 counties who provide most of the direct services to the state's needy citizens. The department has an annual budget of approximately $6.5 billion, roughly one-fourth of the state's budget. Michael O'Keefe is the current commissioner of the department, which has approximately 6,700 employees.

Financial-Related Audit Reports address internal control weaknesses and noncompliance issues found during our audits of state departments and agencies. The scope of our audit of selected department activities in this report was supplemental to the audit work performed as part of the annual statewide audit, the purpose of which is to render an opinion on the State of Minnesota's financial statements for fiscal year 2001. On December 7, 2001, we issued an unqualified opinion on the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 2001. In a separately issued management letter to the Department of Human Services, we identified two issues related to eligibility verification and monitoring that we reported as the result of our statewide audit work.