Candidate Otto finds $12 million error in Dept of Ed fiscal report

[katinmn]

I think I want her watching state budgets!

http://www.rebeccaotto.com/news2006/news040606.htm

Who's watching the watchdog?
State Auditor candidate Rebecca Otto discovers a $12 million error in MN Dept of Education fiscal report
__________________________

April 6, 2006

SAINT PAUL - A Minnesota Department of Education report that has been on Dept of Education servers since September 8 of 2005 contains a $12 million error, says State Auditor candidate Rebecca Otto (D-May Township).

“$11,875,193.00, to be exact,” she says.

The report is the latest published statement of school district revenues throughout the state of Minnesota.

“I was going over education revenue when I noticed the error,” said Otto. “$12 million is a significant amount of money.”

The State Auditor serves to ensure financial integrity, accountability, and cost-effectiveness of Minnesota's local governmental entities, including school districts.

Under State Auditor Patricia Anderson, the office has been working more closely with the MN Department of Education to report school district finances.

Otto said she was “surprised” the error hadn’t been discovered by either the Department of Education or the State Auditor’s office before now. “It’s been posted on the state’s servers for seven months,” she said.

The report is a classification of revenue data for all Minnesota public schools. It contains a mathematical error in each of 22 revenue categories that excludes the revenue from two school districts across the board. “When you add all the mistakes up it totals just short of $12 million in total school revenue,” said Otto.

Otto, a former State Representative, said that without analyzing the numbers being used in the State Auditor’s office and the MN Department of Finance, she has “no idea” whether the error has been incorporated into other reports across state government. “If I was the State Auditor I’d be making a few phone calls,” she said.

Even if the error has been carried across to other state agencies that prepare financial reports and projections for the Governor and the State Legislature, Otto says it’s not likely to have a significant impact. “I don’t think people need to be alarmed,” she said. “$12 million is not enough to skew state-wide figures very substantially, but on the other hand, we should be able to count on the integrity of the numbers that the state is reporting. That’s why we have a State Auditor.”

The question now, says Otto, is “who’s watching the watchdog?”

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A corrected report is here, showing the errors and the corrections.
The original report has been archived here.

The report has since been modified on state servers per Rebecca's corrections.

Posting details of the incorrect report on the MN Department of Education website:
2004 Final Total Revenue 136Kb (9/8/05 1:44 PM)
September 7, 2005
http://education.state.mn.us/mde/static/2004FinalTotalRevenue.xls

Posting details of the corrected report on the MN Department of Education website:
2004 Final Total Revenue (2006-04-06 15:04:00.0) MS Excel document
April 6, 2006 correction to September 7, 2005 file in which two districts were inadvertently omitted from statewide totals

[katinmn]

1. Otto finds more errors in state auditor's report

State Auditor candidate Rebecca Otto says official State Auditor report on Counties contains errors

Announcement follows days after Otto found $12 million education error
________________________________
April 12, 2006

Saint Paul, MN -- An official report on county finances issued March 2 by State Auditor Patricia Anderson contains financial errors, says State Auditor candidate Rebecca Otto.

Otto’s statement follows closely on the heels of her announcement on April 6 that there was a $12 million error in MN Dept of Education financial reporting of school district revenues. That report has since been amended due to Otto’s discovery.

The State Auditor’s web site says the office serves to ensure financial integrity, accountability, and cost-effectiveness of Minnesota's local governmental entities, including counties and school districts.

In examining the State Auditor’s county report, Otto says, she noticed that Table 9, a listing of changes in county reserve fund balances, listed incorrect percentages over 80% of the time.

Otto said this error is especially surprising because reserve fund balances is an area Anderson singled out to criticize local officials about in 2003.

Otto said she went back and checked the year 2000 version of the Table 9, prepared under former State Auditor Judi Dutcher, and found no errors in the percent changes.

Otto said that Table 9 isn’t the only portion of the report that is in error. “It’s just one example. Another one is in the 2005 and 2006 county budget summaries. The State Auditor has incorrectly added Norman county’s amended current expenses, and overstated them by $2,976.”

Otto, a former State Representative, said she is concerned because of the pattern of errors. “Whether it’s $2,976 or $12 million, finding these errors makes you wonder how many others there might be.”

And this, she said, poses a problem. “If policymakers can’t count on the numbers, they can’t make informed decisions. The public should be able to count on the integrity of the numbers that the State Auditor’s office is reporting without feeling like they have to double-check everything. That’s why we have a State Auditor.”

The question now, says Otto, is “who’s watching the watchdog?”

###

The corrected Table 9 detailing the errors and comparing the 2004 Table 9 with the 2000 Table 9 is here (76k)


The original State Auditor’s official report "Minnesota County Finances 2004 Revenues, Expenditures, and Debt & 2005 and 2006 Summary Budgets" published on March 2 has been archived and can be downloaded from here (3.3 meg)