Minnesota State Colleges &
Universities
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©2005 Larson, Allen, Weishair & Co., LLP
November 8, 2005
Agenda
• Audit scope and results
• Required communications
• Testing of internal controls
• Substantive testing
• Reliance on other auditors
• Fraud risk areas and procedures
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©2005 Larson, Allen, Weishair & Co., LLP
• Difficult balances
Audit Scope and Results
— Century College
— Minnesota State University,
Mankato
— Minnesota State University,
Moorhead
— Winona State University
• Results
— Clean opinions on financial
statements
— Clean reports on internal
controls over financial
reporting and compliance
with regulations, grant
agreements, etc.
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©2005 Larson, Allen, Weishair & Co., LLP
• Audited by LarsonAllen
• Auditor Responsibility
• Other Information in Documents Containing Audited
Financial Statements
• Significant Accounting Policies
• Significant Estimates
• Significant Audit Adjustments
• Disagreement with Management
• Consultations with Other Independent Accountants
• Issues Discussed Prior to Retention of Independent
Auditors
• Difficulties Encountered in Performing the Audit
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©2005 Larson, Allen, Weishair & Co., LLP
Required Communications
Testing of Internal Controls
• Cash receipts / revenues – 40 transactions
(tested 40 during the year and 40 after year end
at MSU, Moorhead)
• Cash disbursements / expenses – 40
transactions
• Payroll disbursements
— Overall analytic of fluctuations to prior year performed
by internal auditors
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©2005 Larson, Allen, Weishair & Co., LLP
— 40 transactions
Substantive Testing
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—
—
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Cash
Investments
Perkins loans receivable
Bonded debt liability
State appropriations revenue
Capital appropriations revenue
• Tests of Details
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Student receivables
Accounts payable
Scholarship allowance
Additions to property, plant &
equipment
• Predictive Analytics
— Tuition revenue
— Room & board revenue
— Sales & service revenue
— SEOG, Pell, Perkins, Work
Study revenue (agreed to
GAPS drawdowns)
— Depreciation expense
— Deferred revenue
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©2005 Larson, Allen, Weishair & Co., LLP
• Confirmations
Reliance on Other Auditors
• Legislative Auditors
• KDV as principal auditor
— DOF cash
— Property, plant, &
— SBI investments
equipment additions in
Revenue Fund
— General IT controls
— Securities lending
— DOER compensated
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©2005 Larson, Allen, Weishair & Co., LLP
absences
— Workers compensation
Difficult Balances
• Compensated absences
— Some revisions to total liability
— Significant revisions to current vs. long-term portion of
liability
— Occurred both at the State of Minnesota and at
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©2005 Larson, Allen, Weishair & Co., LLP
MnSCU levels
Fraud Risk Areas (SAS No. 99)
• Auditors required to assess risk of fraud
• Inquiries of management
• Judgmental selection of transactions to test – ranged from
9 to 25 transactions
— Look for supporting documentation
— Recorded in proper fiscal year
— Authorized for disbursement
• Judgmental testing of disbursements to Top 25 vendors –
no exceptions noted
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©2005 Larson, Allen, Weishair & Co., LLP
— No exceptions noted
Thank you for the opportunity to serve
Minnesota State Colleges & Universities
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©2005 Larson, Allen, Weishair & Co., LLP
Questions?