|Financial Audit Division Report 13-06||Released May 17, 2012|
The State of Minnesota’s financial statements were fairly stated in all material respects. However, the state did not comply with the statutory deadline for issuing the financial statements and continued to have weaknesses in internal controls over financial reporting.
Our audit report contains five findings related to internal controls over the preparation of the state’s financial statements and one finding related to delays in drawing federal funds to reimburse for federal grant program expenditures. Three of the findings include concerns from our previous audit that have not been fully resolved.1
In addition, we previously reported to the Department of Management and Budget system security issues in the new accounting system (SWIFT) related to incompatible security roles and the development and assessment of mitigating controls for conflicting security access and incompatible duties.2,3 Establishing and maintaining appropriate security access in the new accounting system is fundamental to the state’s ability to ensure the integrity of its financial operations.
We audited the state’s financial statements for the fiscal year ended June 30, 2012. Our audit encompassed many large state agencies that had financial activities significant to the financial statements.
The Department of Management and Budget is responsible for preparing the state’s annual financial statements, which are included in the State of Minnesota’s Comprehensive Annual Financial Report. To prepare the statements, the department uses information from a variety of sources, including information provided by other agencies. The issues contained in this report relate to weaknesses in internal controls in the state’s financial reporting process as a whole.
1 Office of the Legislative Auditor’s Financial Audit Division Report 12-03, Report on Internal Control Over Statewide Financial Reporting, issued February 16, 2012.
2 Office of the Legislative Auditor, Financial Audit Division, Report 11-24, Statewide Integrated Financial Tools (SWIFT) Application Security Controls, issued November 3, 2011.
3 Office of the Legislative Auditor, Financial Audit Division, Report 12-23, Department of Management and Budget: Statewide Integrated Financial Tools (SWIFT), issued November 16, 2012.