A top state legislator said Thursday that a new audit criticizing the Perpich Center for Arts Education for lacking a variety of internal controls was part of a disturbing pattern in which state-funded agencies were doing a poor job of overseeing their finances.
The comments by Rep. Rick Hansen, chairman of the Legislative Audit Commission, came as the audit said the Perpich Center specialty high school in Golden Valley did not have internal controls to ensure that it safeguarded assets, accurately paid employees and vendors, and produced reliable financial information.
The report on the 310-student school, which receives $6.6 million annually in state money and is tuition-free, covered four years ending in 2007. Among a laundry list of criticisms, the state Legislative Auditor found that the school did not require employees to review monthly bills to identify personal calls on state-issued cell phones and allowed one employee to receive airline travel credits and hotel rewards while traveling on state business.
The school, which houses roughly half of its students in an on-campus dormitory, also did not notify police and the state after two thefts totaling $2,100 occurred at the facility last year.
"It's just one agency after another," said Hansen, DFL-South St. Paul, who said recent state audits had found similar problems with the state Department of Health and Department of Labor & Industry. "These weren't small technical things."
Hansen said it was disturbing that, in some audits like the one involving the Perpich Center, investigators were having to tell the agencies to fix the same things they had told them to address in previous audits. "If they're not fixing things, they're not taking it seriously," he said.
In the case of the Perpich Center, auditors said the school still had not adequately controlled access to its computerized business systems and did not again do a good job of safeguarding receipts.
"They're processing payroll without really checking to see if it's valid and accurate," Cecile Ferkul, the state deputy legislative auditor, said of the school. She described the school as having "pretty significant weaknesses" regarding key financial controls.
In a letter to Legislative Auditor James Nobles, the school's executive director said, "We acknowledge and agree with all aspects of the audit and recognize our responsibility to significantly improve administrative operations." Nathan Davis, the school's top executive, said the center "has acted swiftly to tighten internal controls."
Davis did not respond Thursday to interview requests.
Mike Kaszuba • 612-673-4388
