State Auditor's E-Update - 11/18/2022

1. Message from Auditor Blaha

2. Deadline: Pension Reporting Information

3. TIF: Administrative Expenses Must Be Documented

4. Meeting: Volunteer Fire Relief Association Working Group

5. Avoiding Pitfall: Consolidation of Cash Collection Points

1. Message from Auditor Blaha

First, I want to congratulate all of you working in local elections. Thanks to you, our elections ran smoothly across the state of Minnesota on Tuesday, November 8. Thank you for safeguarding our democracy and ensuring that the voices in our communities are heard.

I am grateful that we get to stay connected for another four years. It has been one of the greatest honors of my life to serve as your Minnesota State Auditor and I can’t wait to see what we will continue to do together.

For those who may be newly elected in your community, consider sharing our E-Updates with them. You may sign-up for the weekly E-Update on our website.

2. Deadline: Pension Reporting Information

Minnesota law requires forfeiture of fire state aid for volunteer fire relief associations that do not submit all required reporting information to the OSA by November 30. If 2021 reporting forms are not fully received in our office by that date, a relief association’s 2022 state aid will be automatically forfeited, and the relief association will not be eligible for future state aid until the 2021 reporting forms are received. The OSA does not have authority to grant filing extensions beyond the November 30 deadline.

If you have questions regarding reporting requirements or need access to online reporting forms, please contact the Pension Division at (651) 282-6110 or pension@osa.state.mn.us.

3. TIF: Administrative Expenses Must Be Documented

Administrative expenses are defined in the TIF Act. An authority must document and keep a record of administrative expenses if the costs are to be paid or reimbursed with tax increment revenues. Administrative expenses are subject to a percentage limitation; an authority cannot simply retain ten percent of all tax increment revenues received for administrative expenses.

For more information regarding administrative expenses, please see the OSA's Statement of Position entitled TIF Administrative Expenses.

If you have any questions, please contact us at TIF@osa.state.mn.us.

4. Meeting: Volunteer Fire Relief Association Working Group

The Volunteer Fire Relief Association Working Group met on November 10 and discussed the audit threshold for relief associations. Currently, an annual audit is required after a relief association exceeds $500,000 in either special fund assets or liabilities. The Working Group members approved moving forward with drafting a proposal to increase the audit threshold to $750,000.

Working Group meeting agendas, materials, and recordings can be found on the OSA website.

5. Avoiding Pitfall: Consolidation of Cash Collection Points

Public entities should review their policies for where cash is collected. Entities should specifically review whether it is necessary for money to be collected by individual departments or divisions. It may be more appropriate for all funds to be collected at one central location, where internal control procedures (checks and balances) are fully implemented.

If an entity has multiple cash collection points, each collection point – even those that handle a small volume of cash – must implement basic internal control procedures, such as segregation of duties, the use of pre-numbered receipts, and regular (preferably daily) deposits.

The Avoiding Pitfall is available on the OSA website.