Office of the Legislative Auditor - Financial Audit Division

Except for payroll expenditures, the Department of Revenue’s internal controls provided reasonable assurance that it accurately recorded financial activity in the state’s accounting system.  The department generally complied with the finance-related legal requirements we tested, but the department should improve its compliance with requirements related to employee travel, protection of not public data, and contracting for professional/technical services. 

Key Findings:

• The department did not accurately pay employees for time worked.
• The department did not adequately safeguard its fixed assets.
• The department did not adequately protect not public data.
• The department gave excessive computer security access to four employees.
• The department did not complete performance reports for some professional/technical contracts, as required by statute.
• The department did not retain key documentation to support its legal compliance for abatement activity.

• Security Access Controls as of January 2007.
• July 1, 2005, through June 30, 2006, for Professional/Technical Expenditures.
• July 1, 2003, through December 31, 2006, for all other activity.

• Payroll and Travel Expenditures
• Selected Administrative Expenditures
• Professional/Technical Services
• Seized Property Activity
• Abatement Activity

Agency Background:

The Department of Revenue administers Minnesota’s revenue system, which manages 28 state taxes (including individual income, sales, corporate franchise, petroleum, environmental, gambling, cigarette/tobacco, alcohol, insurance, and health care provider taxes) and property taxes collected by local government.  The department collected about $15.5 billion in state taxes for fiscal year 2006 and oversaw the uniform application of the property tax laws.