Department of Commerce
Fiscal Year Ended June 30, 2002
Key Findings and Recommendations
- The department omitted certain investments and did not properly report financial activities for the Unclaimed Property Program. Unclaimed mutual fund shares and unclaimed stocks in dividend reinvestment plans, valued at $7.3 million and $1.7 million, respectively, were omitted from balances reported to the Department of Finance. These assets had accumulated for several years; however, they had never been reported for inclusion in the state's financial statements. In addition, the department has not used its statutory authority to sell the unclaimed investments, held for three years. Proceeds from such sales would go to the General Fund. Finally, several financial statement accruals were either not calculated or incorrectly calculated. We recommended that the department should determine the fair market value of omitted investments and accurately determine accruals as of June 30 each year. In addition, we recommended the sale of unclaimed shares in mutual funds and unclaimed stocks in dividend reinvestment plans, held for over three years, in accordance with Minn. Stat. Section 345.47.
- The department did not establish internal controls to ensure the accuracy of its unclaimed property records. We recommended a periodic reconciliation of internal records to actual receipts of cash and securities.
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 2002 audit, our work at the Department Commerce focused on financial activities of the Unclaimed Property Division, securities fees receipts, and one federal program administered by the department.