Office of the Legislative Auditor - Financial Audit Division

• The department did not effectively control adjustments to employers’ unemployment insurance accounts.  Too many staff could update these high-risk transactions, legal staff did not always approve “compromises” exceeding the $2,500 statutory limit, and weaknesses existed over the refund process.

• The department inappropriately discarded military and federal employee wage verification documents.

• One prior audit issue was not resolved.  The department did not consistently monitor and report expenditures for the Community Development Block Grant Program.

Programs material to the State of Minnesota’s financial statements and to federal program compliance for fiscal year 2006.

• Unemployment Insurance Fund
  
  
• Federal Programs, including:
  • Unemployment Insurance Administration
  • Employment Services Cluster
  • Workforce Investment Act Cluster
  • Vocational Rehabilitation
  • Community Development Block Grants

Background:

In fiscal year 2006, The Department of Employment and Economic Development recorded unemployment insurance tax revenues totaling $978 million and paid benefits of $691 million.  The department also managed federal expenditures totaling approximately $194 million.