The Minnesota Zoo overpaid a food service vendor by nearly $30,000, didn't adequately verify that vendors were paying the proper commissions and improperly had the same employee handling receipts and deposits, according to a state audit released Thursday.

The financial review, conducted by Legislative Auditor James Nobles and covering the period from July 2003 through December 2006, found that zoo officials generally used adequate safeguards in their accounting practices.

Nevertheless, the audit highlighted 10 findings and made 19 recommendations for improvement in the areas of cash and revenue operations, payroll and travel expenses, and professional and service contracts.

Two of the findings -- ensuring proper commission revenues from vendors, and problems with reimbursing employee expenses -- were cited in the zoo's last audit in May 2002 and haven't yet been fully resolved, according to Thursday's audit.

In a five-page response dated Monday, Zoo Director Lee Ehmke assured Nobles that the zoo is taking steps to improve most of the financial practices cited by next month if not sooner.

Many of the zoo's failings, according to the audit, were a matter of contractual problems.

For instance, the zoo's contract with the vendor that operates its IMAX theater runs through 2032, according to the audit. State law requires a written exemption from the state for any original contract longer than two years, which the zoo didn't obtain.

The audit also found the zoo sometimes has been sloppy in handling employee expenses.

Two zoo employees were reimbursed for alcohol, which is prohibited by state law. An employee once was reimbursed for a personal flight unrelated to state business, and four employees failed to report frequent flier miles they earned while on zoo business.

Most of the zoo's operating revenue of $19 million comes from admission fees, which amount to about $13 million each year. It also gets about $6.5 million annually from the Legislature.

Kevin Duchschere • 612-673-4455

Kevin Duchschere • kduchschere@startribune.com