Office of the Legislative Auditor - Financial Audit Division

The Department of Employment and Economic Development generally complied with and had controls to ensure compliance with provisions of laws, regulations, contracts, and grants applicable to the major federal programs we audited for fiscal year 2007.  However, the department had the following weaknesses:

• The department did not effectively control access to personnel functions and accuracy of data supporting payroll and travel transactions charged to its federal programs.
• PRIOR FINDING PARTIALLY RESOLVED: The department did not consistently monitor subrecipient expenditures for the federal Community Development Block Grant Program (CFDA 14.228).
• PRIOR FINDING PARTIALLY RESOLVED: The department did not accurately report project expenditures for the federal Community Development Block Grant Program (CFDA 14.228).

Programs material to the State of Minnesota’s financial statements and federal program compliance for fiscal year 2007:

• Unemployment Insurance Fund
• Federal Programs, including:
  -Unemployment Insurance Administration
  - Employment Services Cluster¹
  - Workforce Investment Act Cluster
  - Vocational Rehabilitation
  - Community Development Block Grants
  - Social Security Disability Insurance

¹A cluster of programs is a group of closely related programs that have similar compliance requirements and are treated as a single program.

Agency Background:

In fiscal year 2007, the Department of Employment and Economic Development recorded unemployment insurance tax revenues totaling $890 million and paid benefits totaling $736 million.  The department also managed federal programs totaling approximately $199 million.