Office of the Legislative Auditor State of Minnesota Office of the Legislative Auditor Legislative Audit Commission October 7, 2019 Presentation Outline • OLA overview • Financial Audit Division • Program Evaluation Division • Special reviews • Strengths and challenges O L A 2 Office of the Legislative Auditor October 7, 2019 1
Origins � • LAC and OLA established in 1973 • Nationwide movement to strengthen state legislatures • Bring more staff into the legislative branch • Including independent, nonpartisan auditors, evaluators, and investigators O L A 3 OLA’s Mission • Strengthen legislative oversight and accountability in government • Improve financial management of government organizations and the performance of government programs O L A 4 Office of the Legislative Auditor October 7, 2019 2
OLA’s Primary Goal • Produce assessments of government organizations and programs that are: • Accurate, Objective, Timely, Useful • OLA reports must have credibility O L A 5 Organizational Independence • Legislative Auditor serves a 6-year term • OLA staff have protections • Work products controlled by OLA O L A 6 Office of the Legislative Auditor October 7, 2019 3
Personal Independence • Legislative Auditor and OLA staff must not work on an assignment if they have, or could be perceived to have, an independence impairment (i.e., a conflict of interest). O L A 7 Jurisdiction Executive Higher Metropolitan Nonprofit Judicial Branch Other Branch Education Government Organizations • Constitutional • Courts • University of • Metropolitan • Historical • Public money Officers Minnesota Council Society paid to • Administrative nonprofit • Departments Offices • Minnesota • Mosquito • Agricultural organizations, and Agencies State Control Utilization vendors, and District Research • Boards and others to Institute Commissions • Metropolitan provide public Airports • Enterprise services. Commission Minnesota • ClearWay Minnesota • State Agricultural Society O L A 8 Office of the Legislative Auditor October 7, 2019 4
Authority � • Access to all documents or data, regardless of classification • Public officials, employees, and others required to cooperate with OLA • Authority to issue subpoenas • Ability to protect the identity of sources O L A 9 Responsibilities • Financial statement audits • Financial control and compliance audits • Information technology audits • Program and organization evaluations • Investigations O L A 10 Office of the Legislative Auditor October 7, 2019 5
Organization • 63 professionals • Financial Audit Division • Program Evaluation Division • Special Reviews Unit • IT, Legal, and Administrative Support O L A 11 Appropriations $9,000,000 $8.3M $8.2M } 10% for dedicated $8,000,000 $7.7M purposes $7.0M $6.7M $7,000,000 $6.6M $6.3M $6.2M $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 General Fund PSP Audit Transit Activity Reviews DHS Eligibility & MCO Audits MNLARS/VTRS Transportation & DPS Audits O L A 12 Office of the Legislative Auditor October 7, 2019 6
Expenditures • Compensation is 92% of OLA expenditures • $266,600 (3.75%) for lease Staff Compensation • $161,300 (2.25%) for IT- related expenses O L A 13 Financial Audit Division O L A 14 Office of the Legislative Auditor October 7, 2019 7
Financial Audit Division Work Most work done by the division is Required Discretionary required by law 62% 38% O L A 15 Required Audit Work Federal Health Care Financial Motor Vehicle and Programs Programs Statements Drivers Licensing O L A 16 Office of the Legislative Auditor October 7, 2019 8
Discretionary Audit Work • Assess fiscal controls and compliance with finance-related legal requirements • Topics selected by OLA, with input from policymakers O L A 17 Strategy: Policymaker-Focused Reports • More understandable conclusions • Increased use of visuals • Topics that are important to legislators O L A 18 Office of the Legislative Auditor October 7, 2019 9
Strategy: Increased Subject Matter Expertise � Safety and Education, Information Health and General Economy Environment Technology Human Government and Nonstate Services 11 FTE 2 FTE 8 FTE 8 FTE 8 FTE O L A 19 Strategy: More IT Audit Reports • Only two dedicated IT � auditors � • OLA hopes to use its expertise to help legislators better understand complex IT topics O L A 20 Office of the Legislative Auditor October 7, 2019 10
Work in Progress • AELSLAGID Board • Medical Cannabis Program • US Bank Stadium Reserve • Minnesota State Park Revenues • MCO Dental & Mental Health • Regenerative Medicine Minnesota Encounter Data • SMART Program • Business Continuity Management • State of MN Financial Statements • DPS Bulk Data Sales • Pension Fund Financial Statements • MINNCOR Industries • Federal Program Single Audit • METS Health Care Eligibility • VTRS (Formerly MNLARS) System • Disability Services O L A 21 Program Evaluation Division O L A 22 Office of the Legislative Auditor October 7, 2019 11
Program Evaluation Division Overview • 16 staff • Subject matter generalists • 5-7 program evaluations annually O L A 23 Program Evaluation Topic Selection Process • Legislators and others suggest topics • Legislative Audit Commission narrows down list • Staff develop background information • Survey legislators to gauge interest • Legislative Audit Commission selects final topics O L A 24 Office of the Legislative Auditor October 7, 2019 12
Program Evaluation Topic Selection Criteria ? State Control Impact Timeliness Feasibility Balance & Resources O L A 25 Current Program Evaluations • Compensatory Education Revenue • Minnesota Department of Human Rights • DHS Oversight of Personal Care Assistance • Pesticide Regulation • Public Utilities Commission’s Public Participation Processes • Safety in State Correctional Facilities O L A 26 Office of the Legislative Auditor October 7, 2019 13
Conducting Evaluations • Work in teams • Scope project • Multiple research methods • Data analysis • Interviews • Legal review • Literature review • Site visits • Surveys • Internal and agency draft review • Sourcing and verification O L A 27 Special Reviews and Investigations O L A 28 Office of the Legislative Auditor October 7, 2019 14
Special Reviews and Investigations � • Involve Special Review Director and other available staff as needed • Initiated by OLA in response to specific concerns • Not part of regular work schedule O L A 29 Allegations and Other Reports to OLA • “Report Wrongdoing” link on OLA website • More than 200 � allegations and � Reports of Data Breaches other reports � Allegations or Complaints so far in 2019 � Loss or • Internal review of these � Theft Reports reports every two weeks � O L A 30 Office of the Legislative Auditor October 7, 2019 15
After Receiving a Complaint , OLA: • Conducts a “preliminary assessment” Does OLA have jurisdiction? Is there evidence of wrongdoing? How important is the allegation? • May refer issue to another agency or OLA division • May begin a special review • May close the complaint or assign it low priority O L A 31 Recent Work Products O L A 32 Office of the Legislative Auditor October 7, 2019 16
OLA’s Strengths • Independence • Clear mission and goals • Strong authority • Dedicated professionals • Legislative and public support O L A 33 OLA’s Challenges • Meeting standards and goals • Work vs. resources • Turnover and hiring O L A 34 Office of the Legislative Auditor October 7, 2019 17
Questions? james.nobles@state.mn.us joel.alter@state.mn.us chris.buse@state.mn.us judy.randall@state.mn.us O L A 35 Office of the Legislative Auditor October 7, 2019 18
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