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Auditor Finds Room For Improvement On Legacy Funds

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ST. PAUL, Minn. (AP) — Minnesota has room for improvement in how it manages hundreds of millions of dollars in Legacy Amendment funds, according to two reports issued Wednesday by the Office of the Legislative Auditor.

Voters approved the Legacy Amendment in 2008. It raised the state sales tax by three-eighths of 1 percent to pay for projects in four areas: the outdoors, clean water, arts and culture, and parks and trails. More than $450 million raised has been allocated to projects so far.

“During the Legacy Amendment’s first three years, the Legislature has put significant trust in state agencies, local units of government, and private nonprofit organizations to ensure that Legacy money is used appropriately and effectively. The Legislature has also recognized the need for accountability and put in place various reporting, monitoring, and oversight requirements related to the use of Legacy money,” the first report noted.

“Based on this early review, we think those efforts to ensure accountability are generally adequate. But, clearly, the Legacy Amendment is a ‘work in progress,’ and there are many more years ahead of decision making, monitoring, and oversight to ensure that the purposes of the Legacy Amendment are achieved,” the auditor concluded.

The first report made four key recommendations:

—The Legislature should take steps to better ensure that programs and projects funded with Legacy money supplement but don’t substitute for traditional funding sources.

—Organizations that get Legacy money should better document how their efforts will supplement and not substitute for traditional funding.

— The Department of Management and Budget should give state agencies better guidance to ensure compliance with restrictions on using Legacy money for administrative costs.

—The Clean Water Council should develop better policies and procedures to ensure its members comply with safeguards against conflict of interest.

The other report looked at the internal controls for three of the four funds established by the amendment: the Outdoor Heritage Fund, the Clear Water Fund, and the Parks and Trails Fund. The auditor found that these controls were “generally adequate” to ensure that the organizations used the money for the intended purposes, but it also found “some internal control weaknesses and instances of noncompliance.” They included:

—The Department of Natural Resources, Pollution Control Agency, and Board of Water and Soil Resources failed to ensure that certain costs paid for with Legacy funds complied with restrictions on the uses of those funds.

—The PCA and Board of Water and Soil Resources issued unauthorized advances of Legacy money to grant recipients.

—The DNR, PCA and Board of Water and Soil Resources reimbursed some grantees for costs without ensuring that the costs were allowed.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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