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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Department of Natural Resources
Outdoor Heritage Fund Expenditures
Internal Controls and Compliance Audit


Financial Audit Division Report 17-02 Released January 13, 2017


The Outdoor Heritage Fund is one of four funds created in 2008 when voters approved an amendment, commonly referred to as the “Legacy Amendment,” to the Minnesota Constitution.1 The amendment increased the state’s sales tax by three-eighths of one percent for 25 years and dedicated 33 percent of the additional revenue to the Outdoor Heritage Fund. According to the Legacy Amendment, money from the Outdoor Heritage Fund must be used to “restore, protect, and enhance wetlands, prairies, forests, and habitat for fish, game, and wildlife.”

During the timeframe of our audit, July 2013 through February 2016, the Department of Natural Resources was the largest recipient of appropriations from the Outdoor Heritage Fund. Our audit focused on whether the department had adequate internal controls over its use of the money it received from the fund and whether the department complied with the finance-related legal requirements we selected for testing.

Unlike in previous audits, we did not test compliance with two legal requirements relevant to the use of Legacy money. We did not test the two requirements because their meanings are not sufficiently clear to provide distinct testing criteria. We did not test, 1) whether the department complied with the Legacy Amendment requirement that Legacy money must be used to “supplement traditional sources of funding…and may not be used as a substitute” or, 2) whether administrative costs the department allocated to Legacy appropriations complied with the statutory requirement that Legacy money be used only for costs that are “directly related to and necessary for” the purpose and conditions stated in the relevant appropriation law.2


The Department of Natural Resources designed and implemented internal controls that effectively managed the risks related to its use of money from the Outdoor Heritage Fund, and the department complied with the legal requirements we tested. The department also resolved certain prior audit findings we re-examined in this audit.3

1 Minnesota Constitution, art. XI, sec. 15.
2 Administrative costs (also sometimes referred to as indirect or overhead costs) are costs that are related to the operation of the department as a whole as opposed to expenses related to specific individual projects or appropriations. Examples of administrative costs include facility management, accounting, human resources, legal, and information technology services.
3 Office of the Legislative Auditor, Financial Audit Division Report 14-13, Department of Natural Resources, Findings 1 and 4 (St. Paul, MN, April 17, 2014) and Financial Audit Division Report 11-27, Legacy Funds: Outdoor Heritage, Clean Water, and Parks and Trails, Findings 1, 3, 4, and 6 (St. Paul, MN, November 30, 2011).

More Information

Office of the Legislative Auditor, Room 140, 658 Cedar St., St. Paul, MN 55155 : or 651‑296‑4708