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Dayton says state working to improve accounting system criticized by Legislative Auditor

Posted by: Jim Ragsdale under Gov. Mark Dayton, Minnesota legislature, Democrats, Republicans Updated: July 17, 2013 - 6:18 PM

Gov. Mark Dayton says state budget officials are trying to fix problems in a statewide accounting system that has caused delays in reporting financial information and provoked criticism from Legislative Auditor James Nobles.

Asked about a report by KSTP-TV concerning the $68 million statewide accounting system, Dayton said, "Any time you start on one of these large-scale systems there are often glitches." But he said Jim Showalter, commissioner of Minnesota Management and Budget, is working to fix the problem.

"Obviously it's a problem," Dayton said. "Minnesotans expect absolute integrity and absolute accuracy in our financial statements, and timeliness in reporting."

Nobles, whose office regularly audits state departments and agencies, said budget officials should have gotten a better system for the time and money invested in it.

"What is particularly disturbing to me is that the state spent, by MMB's accounting, $70 million to develop this new accounting system, and took about two years," Nobles said. "They knew they were going to have to make these end-of-fiscal-year financial reports, to meet the requirements of the law and credit rating agencies, and they simply failed to deliver what was needed by the deadlines."

John Pollard, a spokesman for the department, said the state shifted to the new accounting system on July 1, 2011, which turned out to be the first day of a partial statewide government shutdown. The system, known as SWIFT, for Statewide Integrated Financial Tools, essentially keeps track of every transaction involving state funds, Pollard said, and there were glitches during its first full year of operation in 2012.

That delayed required financial reporting to the Legislative Auditor, pushing back the schedule for required audits. Pollard said the department notified Nobles and legislative committees about the delay in reporting. Pollard said the delay did not mean the state lost track of how money is being spent.

But Nobles said the problems with the system have gone beyond the reporting delays.

He said there was an $85,000 difference in accounts of the state lottery between the SWIFT system and the lottery's own figures. And he said he has received complaints from agency heads that the system does not provide them with regular financial information they need to properly manage their agencies.

"There are waves of consequences here," Nobles said. "I think we need to heighten our expectations for the products we get for that kind of money."

Pollard of MMB responded that budget officials are studying the lottery issue, and are not sure it is related to the new accounting system. And he defended the $68 million investment. Shortly after it was inaugurated, he said, the new system helped identify $138 million in federal reimbursement the state would have otherwise not known about.

"It seems to us it was a wise investment and the state is receiving immediate benefits," Pollard said.

Dayton said he first learned for the scope of the problem Wednesday morning. "We're committed to providing quality information, accurate information, on a timely basis, and we won't stop until we do so," he said.

 

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