Legislative Auditor releases 2 ½-year financial performance audit of governor’s office
Thursday, Minnesota’s Office of the Legislative Auditor (OLA) released a report on its two-and-a-half-year examination of the financial performance of the Office of the Governor and Lieutenant Governor.
The audit — which ran from July 1, 2019, through Dec. 31, 2021 — specifically focused on whether the office shared by both the governor and lieutenant governor had proper internal controls to protect resources and comply with finance-related legal requirements.
OLA noted that the governor’s office generally had proper internal controls in place but listed six findings in the report.
—The governor’s office didn’t properly document how it determines how much money to collect from, or allocate to, the 24 state agencies. OLA noted the office allocated the same percentage of funds to the agencies each year but didn’t show how it made calculations to arrive at those numbers, based on the interagency agreements. No other issues there were noted.
—Employees and supervisors within the governor’s office didn’t always sign employee timesheets. OLA noted the office’s employees completed timesheets on paper prior to the COVID-19 pandemic but switched to electronic timesheets during the pandemic. According to the state policy followed by the office, employees and supervisors must both sign timesheets. OLA’s random sample found about half the timesheets didn’t have employee signatures and two didn’t have supervisor signatures. OLA said it didn’t find any other issues with the office’s payroll system, employee pay rates or other payroll expenditures, except for:
—Two employees were incorrectly paid for floating holidays. One of the employees used a floating holiday twice in one fiscal year and the other was paid for an unused floating holiday upon leaving the office, despite the office’s compensation plan not including payments for unused floating holidays.
—Additionally, the office requires employees to have a vacation balance of no greater than 275 hours for managers or 260 hours for other employees at least once each fiscal year or balances are supposed to be cut to those levels at the end of the fiscal year. OLA noted five employees failed to follow that rule but received extensions and didn’t have their vacation balances reduced.
—The governor’s office didn’t keep proper documentation of employee eligibility for paid parental leave. The office’s policy requires employees to be at the office for 12 months to be eligible for the leave but granted two employees exceptions, OLA noted.
—Finally, OLA found that the office doesn’t require those with state purchasing cards to sign new use agreements periodically.
OLA’s primary recommendations for the governor’s office included keeping better documentation for how it calculates allocations and collections for state agencies, employee benefit eligibility and how internal errors are corrected. Additionally, it recommended stronger internal controls for the payroll errors listed and purchasing card agreements.
A letter from Chris Schmitter, the chief of staff for the governor’s office, in response to OLA’s findings said the office has already resolved most of OLA’s findings, including the floating holiday issue and the purchasing card policy controls.
“We appreciate and value the professional review conducted by the OLA’s staff. That work shows that—despite the extraordinary challenges posed by the pandemic—the Office of the Governor
and Lieutenant Governor complied with significant finance-related legal requirements and maintained adequate internal controls,” Schmitter said in the letter.
OLA’s Financial Audit Division selects several organizations and programs in the state’s executive and judicial branches, as well as metropolitan agencies, “semi-state” organizations, state-funded higher education institutions and state-funded programs operated by private organizations each year, based on risk and legislative interest. It last released an audit of the governor’s office in 2015.
Legislative Auditor Judy Randall told 5 EYEWITNESS NEWS that OLA tries to audit the governor’s office at least once every administration, and had planned to conduct this audit sooner but was delayed by the COVID-19 pandemic.
Click here to read OLA’s full report.