Office of the Legislative Auditor - Financial Audit Division
Department of Transportation
Fiscal Year Ended June 30, 2003
Key Findings and Recommendations:
As a result of audit procedures performed by our office and the Department of Transportation (MnDOT) Office of Audit, we identified various weaknesses in internal control and instances of noncompliance. For each finding, we recommended the department establish appropriate procedures or improve its oversight to ensure compliance with federal and state regulations. Areas of concern include:
MnDOT did not ensure the accuracy of the infrastructure and right of way capital outlay expenditures on the state’s financial statements. We noted that MnDOT personnel did not implement sufficient internal controls to ensure they accurately valued the infrastructure and right of way assets and capital outlay expenditures reported in the state’s basic financial statements. We brought certain errors to the attention of MnDOT staff before they compiled the Trunk Highway Fund financial statements. In addition, we recommended several audit adjustments to the Department of Finance for the infrastructure and right of way assets and capital outlay expenditures.
MnDOT should improve certain project oversight procedures. MnDOT Office of Audit repeated several issues from its previous audit and identified several new areas where departmental procedures were inadequate and needed improvement.
MnDOT over obligated federal funds under the airport improvement program. For one state project under the federal Airport Improvement Program (CFDA #20.106), MnDOT Office of Audit noted that federal funds were over obligated by $166,000. The department should develop procedures to monitor the available balance of federal funds.
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 2003 audit, our work at the Department of Transportation focused on state highway construction expenditures, grants for airport improvement, and grants to local governments for road construction and maintenance. We also reviewed local bridge project and transit operation disbursements. Finally, we reviewed two federally funded programs administered by the department to determine whether the department complied with certain federal requirements. Our work on the federal programs was performed in conjunction with the MnDOT Office of Audit.