Questions & Answers

Question 1: What were the fees charged and hours incurred by the external auditors for the System audit, the Revenue Fund audit, Student Financial Aid audit and the St. Cloud State University and Winona State University financial statements for the last 2 years?

Response 1: The following table breaks out external audit costs for Minnesota State’s most recent contract. We do not have a breakdown by hours.

	FY 2014	FY 2015	FY 2016
Systemwide Financial Statement Audit	188,000	188,000	188,000
Revenue Fund Financial Statement Audit	24,440	24,440	24,440
St. Cloud State University Financial Statement Audit	31,020	31,020	31,020
Winona State University Financial Statement Audit	30,080	30,080	30,080
Itasca Community College Student Housing Funds, Itasca Hall and Wenger Hall (ICCSH) Financial Statement Audit	6,580	6,580	6,580
KVSC Radio 88.1 FM (at St. Cloud State University) Financial Statement Audit	3,760	3,760	3,760
Federal Student Financial Aid Audit	30,080	30,080	30,080
NCAA Agreed Upon Procedures: Bemidji State University	N/A	4,700	N/A
NCAA Agreed Upon Procedures: Minnesota State University, Mankato	N/A	5,640	N/A
NCAA Agreed Upon Procedures: Minnesota State University Moorhead	N/A	4,700	N/A
NCAA Agreed Upon Procedures: Southwest Minnesota State University	N/A	4,700	N/A
NCAA Agreed Upon Procedures: St. Cloud State University	N/A	5,640	N/A
NCAA Agreed Upon Procedures: Winona State University	N/A	4,700	N/A

Question 2: What is the typical timing of fieldwork including interim and risk assessment procedures and when are audit schedules and financial statements ready for audit?

Response 2: Interim and risk assessment procedures have usually occurred May thru July. Audit schedules and financial statements are usually ready in mid-September through October.

Question 3: Will it be necessary to visit various campuses to obtain audit documentation or is information available electronically? Please answer in relation to student financial assistance testing as well.

Response 3: This has varied for the systemwide audit. The external auditors have scheduled multiple weeks to be onsite at Minnesota State’s system office in St. Paul. The system office’s financial reporting staff typically pass on auditor requests to individual colleges and universities who send them information and documents electronically. Each year the external auditors have included some campus visits to conduct internal control walkthroughs on a rotational basis.

The external auditors have gone onsite when conducting audit work for universities that have had a separate audit of their own individual financial statements.

Federal student financial aid audit work had primarily been done remotely. The external auditors have submitted requests for information to financial aid directors who send them information and documents electronically.

Question 4: What types of journal entries have been proposed by the external auditor in prior years?

Response 4: Very few journal entries have been proposed by the external auditor. Occasionally a journal entry is recommended for an accounts payable cut off or capitalized interest related to GO bonds.

Question 5: Have there been any disagreements with the current auditors over any accounting or auditing matters?

Response 5: No, there have not been any disagreements with the current auditors over any accounting or auditing matters.

Question 6: Have there been any significant deficiencies, material weaknesses or deficiencies in internal control identified in recent years?

Response 6: Minnesota State has not had any significant deficiencies or material weaknesses in recent years.

Question 7: Is there any significant litigation involving the entities currently?

Response 7: Any significant litigation is reported in the financial statements under the contingent liability notes. There are usually one to three included in the systemwide financial statements. For the year ended June 30, 2016, there were two lawsuits that may be in excess of $500,000 (Note 17, page 71).

Question 8: Has there been any recent fraud or misappropriation at any of the colleges/universities?

Response 8: Colleges and universities occasionally experience immaterial frauds or misappropriation of assets.

Question 9: The RFP indicates that the internal audit department is available to provide limited assistance to the external audit upon request. Please indicate how much time the internal audit department devoted to the external audit process and the nature of the work performed for each of the past 2 years.

Response 9: Internal audit has not provided auditors to conduct audit work for the external auditor in the most recent contract. The internal auditing department has been a resource for questions, coordinated computer system access, and facilitated regular status update meetings between the external auditor and Minnesota State’s financial reporting team.

Question 10: Please indicate the maximum number of internal audit hours the Office of Internal Auditing will be willing to contribute towards the external audit process for each of these six institutions on an annual basis.

Response 10: Internal auditing plans to provide a similar role and nominal hours as described in the prior question and answer.

Question 11: Please clarify who will be reviewing the proposals and making the recommendation of the auditors to the Minnesota State Colleges and Universities Audit Committee?

Response 11: The proposals will be reviewed by a team consisting of internal audit and financial reporting staff. Executive Director Pyland will make the recommendation to the audit committee.

Question 12: Is there specific weighting assigned to the proposal evaluation criteria listed in Section IV. of the RFP?

Response 12: No, there is not a specific weighting assigned to the proposal evaluation criteria.