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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary

Financial-Related Audit

Department of Commerce

July 1, 1999, through June 30, 2002

Key Findings and Recommendations

  • The Department of Commerce accepted questionable terms in an insurance settlement agreement. The final agreement identified the insurance company's required payment as a market conduct examination fee reimbursement. We think it should have been identified as a penalty, fine, or investigative cost. In addition, the final agreement included a "no comment" or confidentiality provision that we think was inappropriate and, potentially, in conflict with state law.

  • Two appropriation accounts were incorrectly assigned attributes that allowed carry-forward of $2.6 million from fiscal year 2002 into fiscal year 2003. The department corrected the accounts in April 2003, and moneys were cancelled back to the General Fund. We recommend that the Department of Commerce use more caution and scrutiny when establishing its appropriation accounts.
Agency Background

The Department of Commerce regulates utilities, financial institutions, licensed businesses and individuals, retail businesses, and commercial activity. During the period covered by our audit, Department of Commerce commissioners included David Jennings (July 1999 to August 1999), Steve Minn (August 1999 to February 2000), and James Bernstein (February 2000 to January 2003). Governor Tim Pawlenty appointed Glenn Wilson as commissioner effective January 6, 2003.

Financial-Related Audit Reports address internal control weaknesses and noncompliance issues noted during our audits of state departments and agencies. The scope of our audit work at the Department of Commerce included financial management, telephone and energy assessments, payroll, rent, professional contract services expenditures, and insurance settlement agreements.

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