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The audit is the latest evidence of problems with the state's internal tracking system.

Audit finds MMB missed federal reporting deadline

MMB Commissioner Jim Schowalter blamed the delay on the new accounting system.

MMB Commissioner Jim Schowalter blamed the delay on the new accounting system.

Minnesota Management and Budget (MMB) has failed to provide a full and timely accounting to the U.S. government of the state’s use of federal money, according to a new report from the Office of the Legislative Auditor. An investigation into the budgeting system found the state failed to comply with federal reporting requirements for fiscal year 2012, which ended in June of that year.

The scope of the audit covered the state’s federally funded programs in excess of $30 million. In its conclusion, the audit says MMB failed to “design, develop, and test the process” used to prepare its report. The state was supposed to file its spending details with the federal government by March 31, but missed that date by several months, instead submitting its report in late June.

“The Department of Management and Budget should re-evaluate its federal expenditure reporting process to ensure the timely completion of the state’s federal single audit report,” reads the audit’s recommendation.

The audit is the latest evidence of problems with the state’s internal tracking system, the Statewide Integrated Financial Tools, or S.W.I.F.T. The $70 million program was approved by former Gov. Tim Pawlenty, but did not launch until July 2011.

Earlier this month, Legislative Auditor Jim Nobles said the technological glitches have yet to be fixed, and warned that the situation could force the department to miss another deadline. As required in statute, the OLA must complete an audit of the previous fiscal year’s budget by December 31. This year, that audit was not completed until March, due to delays related to the S.W.I.F.T. program. OLA typically begins its work on the comprehensive audit in July or August, and has yet to start work on the review of fiscal year 2013, which ended June 30.

Asked about Nobles’ complaints, Gov. Mark Dayton called for patience, saying MMB was working to address the problem, but House Minority Leader Kurt Daudt has said Dayton should call a special session this fall if the program is still dysfunctional.

In a written response attached to the OLA audit of federal funds, MMB Commissioner Jim Schowalter said the delays were caused by the agency’s use of S.W.I.F.T. for the first time.

“The learning curve associated with a new system of this size and complexity was considerable,” Schowalter wrote. “This impacted our internal staff as well as state agency personnel who contributed various items necessary for reporting.”

Schowalter went on to express his regret that the department’s adjustment to the new system had caused delays, but said its work in completing the report would “ultimately result in improvements over prior years.”

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