Office of the Legislative Auditor - Financial Audit Division

Overall Conclusion:

Lake Superior College did not establish adequate controls to prevent or detect fraud or accounting errors and to ensure compliance with state statutes and Minnesota State Colleges and Universities’ (MnSCU) policies.

Key Findings:

• The former vice president of finance and administration, terminated in November 2005 for gross misconduct, inappropriately submitted duplicate claims and incurred ineligible expenses.

• Lake Superior College did not establish an effective control environment.

• The college did not effectively delegate authority for key financial decisions.

• The college did not adequately manage its budgeting process.

• The college did not monitor its outstanding student accounts receivable.

• The college did not obtain bids or have contracts for certain services.

Audit Period:
July 1, 2002, to June 30, 2005

• Control Environment
• Financial Management
• Tuition
• Payroll
• Auxiliary Enterprise Activities
• Administrative Expenditures

Lake Superior College resulted from a 1995 merger of Duluth’s community and technical colleges. It is one of 32 colleges that make up the Minnesota State Colleges and Universities system. The college served about 8,500 students in fiscal year 2005, representing a full-time equivalent of over 3,400 students. Lake Superior College offers more than 90 technical majors and courses from 27 academic disciplines. Dr. Kathleen Nelson is the college president.