OSA Weekly Update - 9/26/2025
1. Message from Auditor Blaha
2. Meeting: Fire Relief Association Working Group
3. New: 2025 Audits and Thresholds Webpage
4. Avoiding Pitfall: Monitoring Internal Controls
1. Message from Auditor Blaha
Thank you, National State Auditors Association (NSAA) Information Technology group and the Minnesota Government Finance Officers Association (MNGFOA), for inviting me to speak at your conferences this week! As usual, the ideas and feedback the attendees shared with me was even more valuable than what I shared with them.
At the NSAA IT Conference, I joined Legislative Auditor Judy Randall in delivering opening remarks. We discussed how we used our IT audit as a case study in how to turn what can be a politicized and stressful process into one that not only improves our work but calms political waters as well.
At the MNGFOA Annual Conference, I presented on the ongoing public finance staff shortage. I highlighted the efforts of our Audit and Reporting Group (AaRG), which has been working to better understand and address this challenge. Attendees had some great ideas for how to respond.
I’d love to visit with your group too! If you would like me to share these presentations or create one special for you, contact Executive Aide Burke Spizale at Burke.Spizale@osa.state.mn.us or (612) 469-4447.
2. Meeting: Fire Relief Association Working Group
The State Auditor’s Fire Relief Association Working Group will hold its final meeting of the year on Sept. 30, from 2 – 3:30 p.m., with options to attend in-person at our office in Saint Paul or remotely via Teams. Meetings will also be livestreamed with recordings and meeting materials available on the OSA website. Topics on the meeting agenda include clarifying service credit provisions for firefighters who return to active service after a break in service, and a final review of the Working Group’s legislative proposals for the 2026 Legislative Session.
3. New: 2025 Audits and Thresholds Webpage
The OSA created a webpage outlining new audit thresholds. The Minnesota Legislature recently changed audit and reporting requirements for Cities, Towns, and Special Districts, effective Aug. 1, 2025, for audits performed in 2026. The audit threshold has been raised to $1,000,000, with annual inflation adjustments. Although the threshold increase may reduce the audit requirements for some entities, certain contracts or grants may still impose audit obligations. All counties must continue annual GAAP audits regardless of revenue. To qualify for aid distributions after Aug. 1, 2025, all financial reports must be submitted on time to the OSA. Click here to learn more.
4. Avoiding Pitfall: Monitoring Internal Controls
One of the most important steps public entities can take to prevent fraud is to monitor their internal controls on a regular basis. Monitoring allows entities to determine (a) if the controls are being followed, and (b) if the controls are still effective. An entity may adopt a control, but that control will not be effective if employees or management consistently ignore or circumvent the control. Additionally, changes in an entity or the environment in which the entity functions may reduce the effectiveness of internal controls. Those changes could stem from budget reductions, which could result in organizational restructuring or in a modification in the services provided by the entity. Changes could also stem from technology changes, such as updated information systems. A best practice is to establish a schedule on which each internal control will be reviewed and tested to see if it is functioning as intended and still effective. Annually is a common cycle for such reviews; entities that do not have the capacity to review all controls annually may wish to stagger review cycles over multiple years. When inadequacies in an existing control are detected, either through a scheduled review or through day-to-day work, the entity should act promptly to correct the problem, either through a revised control (if needed) or through action to ensure that the existing control is being applied as intended.
Maintaining sound internal controls is an ongoing process, which is vital to protecting public assets.
The full Avoiding Pitfall is available on the OSA website.