Office of the Legislative Auditor - Financial Audit Division

The Minnesota Department of Transportation (MnDOT) generally complied with federal requirements for the administration of federal programs.  However, the department had some weaknesses in its internal controls and compliance with federal financial activity, which resulted in the following findings repeated from our prior audit report:

• MnDOT did not adequately follow certain project oversight procedures. 
• MnDOT erroneously coded change orders as participating in federal funding.

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

• Infrastructure and Right of Way: Capital Outlay
• Federal Highway Construction and Planning Grants (CFDA 20.205)
• Federal Airport Improvement Grants (CFDA 20.106)

Background:

The Minnesota Department of Transportation maintains over $7.7 billion in state highway infrastructure and right of way assets.  During the fiscal year ended June 30, 2007, expenditures for infrastructure and right of way were $404 million and $94 million, respectively.  These costs are funded in part by federal grant funds.