Minnesota’s state budget office has missed a critical reporting deadline for how it spent federal tax dollars in 2012, drawing increased scrutiny of federal dollars in some areas of state government.

“They had a plan, they had a process and it did not work,” said Cecile Ferkul, deputy legislative auditor. “They didn’t achieve compliance with what they needed to achieve.”

The Legislative Auditor’s office released a report Thursday saying that Minnesota Management and Budget did not meet the March 31 deadline for detailing how it spent more than $12 billion in federal dollars on everything from student financial aid to Medicaid.

Minnesota Management and Budget has switched over to an entirely new accounting computer system, which has been a mammoth undertaking.

Budget officials notified rating agencies and state officials as early as December that switching over to the new computer system had caused unexpected delays.

Minnesota Management and Budget spokesman John Pollard said all the federal dollars are accurately accounted for and they expect the delay to be a one-time issue.

Other states that switched over to the new computer system experienced similar delays, Pollard said.

Budget officials are expected to have the newest numbers submitted by the end of the month.

Ferkul said the state colleges and universities were notified that they will face increased scrutiny when they draw federal funds until the new reports are submitted.

Public safety grants could be in jeopardy if the reports are not submitted by October, she said.

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