Office of the Legislative Auditor - Financial Audit Division

Report Summary
Minnesota Racing Commission
Internal Control and Compliance Audit

 

Financial Audit Division Report 10-32

Released October 14, 2010

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Conclusion

The Minnesota Racing Commission did not have adequate internal controls to ensure it safeguarded or accurately recorded license revenues in the accounting system, or that employee expense reimbursements complied with finance-related legal requirements. The commission generally had adequate internal controls over other revenues and administrative expenditures to ensure it safeguarded its assets, accurately paid employees and vendors in accordance with management’s authorization, complied with finance-related legal requirements, and produced reliable financial data. However, it had internal control weaknesses in these areas.

For the items tested, the commission generally complied with finance-related legal requirements. However, the commission had specific instances of noncompliance in some areas.

The commission substantially resolved a prior audit finding.

Findings

• The Minnesota Racing Commission did not monitor the effectiveness of the internal controls related to some of its financial operations.
• The commission did not have adequate controls over licensing receipts.
• The commission did not have adequate internal controls and procedures to ensure it accurately compensated employees for overtime worked or that direct supervisors approved employee time sheets in some cases.
• The commission did not adequately ensure compliance with state travel policies.
• The commission did not always properly administer its professional/technical services contracts.
• The commission did not accurately pay Breeders’ Fund awards in some cases.

Audit Objectives and Scope

Objectives		Period Audited
Internal Controls Compliance		July 1, 2007, through March 31, 2010
Programs Audited
License Revenues, Card Club Tax Revenues, Pari-Mutuel Tax Revenues, and Reimbursement Revenues		Payroll and Employee Travel Reimbursements and Contract Service Expenditures