The Office of Audit is an essential part of MnDOT’s effort to establish Internal Controls in the department, which we are required to do by Minnesota Statute 16A.057 “Internal Controls and Internal Auditing. State Statute
The Office of Audit fulfills the purpose and intent of the law, which requires that, the office:
- “Safeguard public funds and assets and minimize incidences of fraud, waste and abuse;
- Endure that programs are administered in compliance with federal and state laws and rules; and
- Require documentation of Internal Control procedures over financial management activities, provide for analysis of risks, and provide for periodic evaluation of control procedures to satisfy the commissioner (Minnesota Management and Budget) that these procedures are adequately designed, properly implemented, and functioning effectively.”
The Office of Audit reports to the Chief Financial Officer and has the authority to provide professional audit services department-wide, regardless of MnDOT’s organizational structure.
Pre-Award, Rates and Consultant Liaison Unit
The Pre-Award, Rates and Consultant Liaison Unit is responsible for conducting pre-award audits on entities that MnDOT will potentially enter into a contract with. They review the financials, rates, and cost proposal and make recommendations to be utilized in the contract to eliminate questions and unallowable costs at the time of post-award audits.
The Unit is also responsible for reviewing, approving/accepting indirect cost rates for consultants and grant recipients. The reviews ensure that the rates are in conformance with the federal regulations.
Finally, Pre-Award, Rates and Consultant Liaison Unit act as a liaison between the consultants and MnDOT to build a working relationship between the consultants and MnDOT.
Contract Close-Out Unit
The Contract Close-Out Unit conducts desk and field post-award audits of claims by Consultants, Planning Agencies, Railroads, Utilities, Transit and various other entities as a result of contracts/grants entered into between MnDOT and these entities. Audits are conducted on submitted invoices and source documentation under these contracts. The auditing function is always to be conducted with the highest standards of business ethics, integrity and honest dealings in all areas and functions within the department and with all outside parties.
For Desk Audits, the Contract Close Out Unit ensures that costs paid under the provisions of the contract or grant with an outside organizations are supported by source documentation and are in compliance with applicable laws, regulations, policies, procedures and contract provisions.
Field Audits are conducted to determine if the organization’s accounting system is capable of identifying costs for cost type contracts, acceptability and methodology of allocated and/or indirect cost plans and whether charges invoiced under contracts/grants are supported by their cost accounting system and reimbursable under state and federal laws, rules and regulations.
The Internal Audit Unit conducts independent reviews of processes for various entities. The reviews follow state statutes, policies, procedures and/or controls put in place by the state and MnDOT’s management team. Two separate work groups work with management and their mission to accomplish the department’s objectives. Their roles are described below.
Continuous Audit/Investigations Unit
Investigations - Reports of wrongdoing submitted via our hotline and/or website are reviewed or audited.
Continuous Audits - Look at a various processes within the department in every district to ensure efficiency and effectiveness, consistency across the department and provide a reasonable assurance that fraud is not occurring.
Additive Rates - Review the cost rates established by the MnDOT Office of Finance to determine if they were developed correctly, consistent with prior years and include all eligible costs.
Single Audit/Construction Claims Unit
Single Audit - In accordance with 2 CFR Part 200, Subpart F, perform compliance reviews of the Department’s programs receiving federal assistance under the Federal Highway, Planning, and Construction Program (Catalog of Federal Domestic Assistance No. 20.205, or CFDA 20.205).
Construction Claims - The reviews provide assurance that costs claimed are reasonable and justifiable. They also ensure internal controls and OCIC practices are being followed.
System Audits - Evaluating and specifying the extent to which the management of data in computer systems used throughout MnDOT operations is consistent with existing policies and satisfies the need for statewide, reliable, verifiable and accurate information.