Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Finance
Federal Compliance Audit

 

Financial Audit Division Report 09-14

Released March 26, 2009

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Conclusion

The Department of Finance generally complied with and had controls to ensure compliance with certain provisions of laws, regulations, contracts, and grants applicable to the state’s administration of federal programs and the preparation of the Financial and Compliance Report on Federally Assisted Programs for fiscal year 2008. However, the state had a material weakness in its internal controls over subrecipient monitoring and had some deficiencies in its internal controls over the preparation of the Schedule of Expenditures of Federal Awards, as noted in the following Findings and Recommendations section.

Findings

• The Department of Finance did not ensure that state agencies complied with federal requirements and state policy related to federal funds passed through to subrecipients.
• Prior Finding Partially Resolved: The state’s procedures for preparing the Schedule of Expenditures of Federal Awards resulted in a significant audit adjustment and two errors to the draft schedules and impacted the determination of major programs to be audited under the Single Audit Act.

Audit Objectives and Scope

The objective of our audit was to determine whether the Department of Finance complied with federal program requirements in its oversight and administration of the state’s federal programs, including the general compliance requirements related to federal assistance and preparation of the Schedule of Expenditures of Federal Awards for fiscal year 2008. This audit is part of our broader federal Single Audit objective to obtain reasonable assurance about whether the State of Minnesota complied with the types of compliance requirements that are applicable to each of its federal programs.