Office of the Legislative Auditor - Financial Audit Division

Report Summary
Internal Controls Over Statewide Financial Reporting

 

Financial Audit Division Report 16-05

Released February 11, 2016

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Annually, the Department of Management and Budget prepares the State of Minnesota’s Comprehensive Annual Financial Report. Included in that report are the state’s basic financial statements for the past fiscal year. To prepare the statements, the Department of Management and Budget uses information from a variety of sources, including information provided by other agencies. Our audit resulted in an opinion on the basic financial statements, providing assurance that the statements are fairly stated, in all material respects, in accordance with generally accepted government accounting principles.

As part of our audit, we reviewed the state’s internal controls over its financial reporting process and its compliance with legal requirements related to financial reporting. The state partially resolved the internal control findings related to its financial reporting process from our previous audit.¹ However, we identified some significant deficiencies in the state’s internal controls over financial reporting during the current audit. We explain those deficiencies in the following findings.

Finding

• The Department of Management and Budget did not have adequate internal controls to ensure it informed us about a settlement with the Internal Revenue Service and discussed with us whether it warranted disclosure in the notes to the financial statements.
• The Department of Human Services did not have adequate internal controls to prevent or detect an error in its calculation of a General Fund receivable. We reported a similar issue in our previous audit.

Audit Scope

We audited the state’s financial statements for the fiscal year ended June 30, 2015. Our audit scope included many large state agencies that had financial activities significant to the financial statements.

 

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¹ Office of the Legislative Auditor’s Financial Audit Division Report 15-02, Internal Controls Over Statewide Financial Reporting, issued February 19, 2015.