Office of the Legislative Auditor - Financial Audit Division

Report Summary
Perpich Center for Arts Education
Internal Control and Compliance Audit

 

Financial Audit Division Report 08-24

Released October 9, 2008

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Conclusions

The Perpich Center for Arts Education’s (center) internal controls were not adequate to ensure that it safeguarded its assets, accurately paid employees and vendors in accordance with management’s authorization, produced reliable financial information, and complied with finance-related legal requirements. For the items tested, the center did not comply with finance-related legal requirements over its financial activities. The report contains 17 findings related to internal control and legal compliance deficiencies.

Key Findings

• The center did not adequately fulfill its financial management responsibilities to control certain activities and ensure that it complied with state and center policies.
• The center did not adequately control access to the state’s or the center’s computerized business systems.
• The center did not adequately safeguard all receipts, separate incompatible duties in its receipt process, or reconcile recorded receipts to the deposit records.
• The center’s internal controls were not adequate to ensure it accurately paid its employees.
• The center’s internal controls over travel and other reimbursements were not adequate to ensure the accuracy of the reimbursements.
• The center did not establish sufficient internal controls or comply with legal requirements for the procurement of goods and services.
• The center did not properly administer its professional/technical service contracts.

Audit Objectives and Scope

Objectives	Period Audited
Internal Controls Compliance	Fiscal Years 2004, 2005, 2006, and 2007
Programs Audited
Payroll and Other Administrative Expenditures	Selected Receipts

Background

The Center for Arts Education is an executive branch agency of the State of Minnesota. Its mission is to provide all Minnesota students the opportunity to develop and integrate their artistic and academic abilities to their highest potential. The center operates a public residential arts high school with enrollment limited to 310 11th and 12th grade students from throughout Minnesota. Approximately half of the student population resides in a dormitory on campus. The center provides resources to students, communities, educators, teaching artists, and school districts across Minnesota to improve the quality and access to arts education in the state.