|Financial Audit Division Report 15-01||Released January 22, 2015|
The Office of MN.IT Services1 (MN.IT) is a state agency that provides information technology services2 to other state agencies. State law requires state agencies to reimburse MN.IT for the cost of those services.3
About 20 percent of the information technology services MN.IT provides are services that are used by numerous state agencies. For these shared services, MN.IT bills state agencies using a rate it developed as a basis for the reimbursement amounts. For fiscal year 2013, MN.IT billed state agencies approximately $93.7 million for these shared information technology services. State agencies reimbursed MN.IT with money from a variety of sources, including federal and state money legally restricted for specific program purposes.
The objective of our audit was primarily to determine whether MN.IT complied with federal and state legal requirements when it developed the rates used to bill state agencies for the shared information technology services.
The Office of MN.IT Services did not comply with federal and state legal requirements in developing the billing rates it used to charge state agencies for certain shared information technology services.
The Office of MN.IT Services used billing rates that significantly overcharged for some shared information technology services to offset other billing rates that significantly undercharged for some shared information technology services.
1 The Office of MN.IT services was known as the Office of Enterprise Technology until its name was changed by Laws of Minnesota 2014, chapter 134, sec. 21.
2 Information technology services include developing and maintaining the computer applications and networks used by state agencies to process, store, transmit, and secure electronic data.
3 Minnesota Statutes 2014, 16E.14, subd. 3.