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Minnesota Department of Transportation This document is made available electronically by the Minnesota Legislative Reference Library as part of an ongoing digital archiving project. http://www.leg.state.mn.us/lrl/lrl.asp Minnesota Department of Transportation MnPASS Program November 2018 Financial Audit Division Office of the Legislative Auditor State of Minnesota Financial Audit Division The Financial Audit Division conducts 40 to 50 The Office of the Legislative Auditor (OLA) also audits each year, focusing on government entities has a Program Evaluation Division. The Program in the executive and judicial branches of state Evaluation Division’s mission is to determine the government. In addition, the division degree to which state agencies and programs are periodically audits metropolitan agencies, several accomplishing their goals and objectives and “semi-state” organizations, and state-funded utilizing resources efficiently. higher education institutions. Overall, the division has jurisdiction to audit approximately OLA also conducts special reviews in response to 180 departments, agencies, and other allegations and other concerns brought to the organizations. attention of the Legislative Auditor. The Legislative Auditor conducts a preliminary Policymakers, bond rating agencies, and other assessment in response to each request for a decision makers need accurate and trustworthy special review and decides what additional action financial information. To fulfill this need, the will be taken by OLA. Financial Audit Division allocates a significant portion of its resources to conduct financial For more information about OLA and to access statement audits. These required audits include its reports, go to: www.auditor.leg.state.mn.us. an annual audit of the State of Minnesota’s financial statements and an annual audit of major federal program expenditures. The division also conducts annual financial statement audits of the three public pension systems. The primary objective of financial statement audits is to assess whether public financial reports are fairly presented. The Financial Audit Division conducts some discretionary audits; selected to provide timely and useful information to policymakers. Discretionary audits may focus on entire government entities, or on certain programs managed by those entities. Input from policymakers is the driving factor in the selection of discretionary audits. Photo provided by the Minnesota Department of Administration with recolorization done by OLA. (https://www.flickr.com/photos/139366343@N07/25811929076/in/album-72157663671520964/) Creative Commons License: https://creativecommons.org/licenses/by/2.0/legalcode OFFICE OF THE LEGISLATIVE AUDITOR STATE OF MINNESOTA • James Nobles, Legislative Auditor November 29, 2018 Senator Mary Kiffmeyer, Chair Legislative Audit Commission Members of the Legislative Audit Commission Charles Zelle, Commissioner Minnesota Department of Transportation This report presents the results of our internal controls and compliance audit of the Minnesota Department of Transportation’s MnPASS program for the period July 2014 through February 2018. The objectives of this audit were to determine if the department had adequate internal controls over selected financial activities and complied with significant finance-related legal requirements. This audit was conducted by Scott Tjomsland, CPA (Audit Director); Natalie Mehlhorn (Auditor-in-Charge); and Bill Dumas (Staff Auditor). We received the full cooperation of the department’s staff while performing this audit. Sincerely, James R. Nobles Christopher P. Buse Legislative Auditor Deputy Legislative Auditor Room 140 Centennial Building, 658 Cedar Street, St. Paul, Minnesota 55155-1603 • Phone: 651-296-4708 • Fax: 651-296-4712 E-mail: [email protected] • Website: www.auditor.leg.state.mn.us • Minnesota Relay: 1-800-627-3529 or 7-1-1 Table of Contents Page Report Summary ..................................................................................................... 1 Audit Overview ....................................................................................................... 3 MnPASS Program Overview ............................................................................. 3 Financial Activity ............................................................................................... 7 Audit Scope ........................................................................................................ 8 Audit Objectives ................................................................................................. 9 Audit Methodology and Criteria ........................................................................ 9 Conclusions ...................................................................................................... 10 Finding and Recommendations ............................................................................. 11 Agency Response .................................................................................................. 13 MnPASS Program 1 Report Summary The Minnesota Department of Transportation is the state agency responsible for operating the MnPASS program. MnPASS express lanes help reduce congestion on some of the busiest roads in the Twin Cities metropolitan area. Buses, motorcycles, and vehicles with two or more occupants can use the dedicated express lanes free during peak travel times. Solo motorists pay a fee when they choose to use the MnPASS lanes during peak travel periods. The Office of the Legislative Auditor (OLA) conducted this selected scope audit to determine whether the department had adequate internal controls and complied with significant finance-related legal requirements related to the MnPASS program. The period under examination went from July 2014 through February 2018. Conclusion The Department of Transportation’s internal controls over the MnPASS program were generally adequate. For the transactions tested, the department generally complied with significant finance-related legal requirements. However, OLA found one recordkeeping issue with the specific accounts for each MnPASS corridor. Internal Controls Not Generally Not Generally Adequate Adequate Adequate Adequate Legal Compliance Did Not Generally Did Generally Complied Comply Not Comply Complied Finding The Department of Transportation did not maintain accurate account balances for each MnPASS corridor account. MnPASS Program 3 Audit Overview This report presents the results of an internal controls and compliance audit of the MnPASS program. The Minnesota Control Department of Transportation is Environment responsible for establishing internal controls to safeguard assets and ensure Risk compliance with applicable laws, Monitoring regulations, and state policies. Assessment A strong system of internal controls begins with management’s philosophy, operating style, and commitment to Information and Control ethical values. It also includes processes Communication Activities to continuously assess risks and implement control activities to mitigate risks. A successful internal controls system includes iterative processes to monitor and communicate the effectiveness of control activities. MnPASS Program Overview To reduce congestion, the Department of Transportation operates designated express lanes on some of the busiest highway corridors in the Twin Cities metropolitan area. The MnPASS program provides free use of express lanes during peak travel times to public transit vehicles, motorcycles, and vehicles with two or more occupants. The program also allows solo motorists to use the express lanes during peak travel times for a fee. The express lanes are open to all motorists during non-peak travel times. Before MnPASS, express lanes were only available during peak travel times to public transit vehicles, motorcycles, and vehicles with two or more occupants. The original intent was to reduce congestion by providing an incentive for motorists to carpool or use public transit. However, when limited to just high occupancy and public transit vehicles, the express lanes did not operate at full capacity. In 2003, the Legislature authorized use of the express lanes by solo motorists, and the first MnPASS lanes opened on Interstate 394 in May 2005.1 1 Minnesota Statutes 2018, 160.93, subd. 1. 4 Department of Transportation MnPASS Corridors The MnPASS program currently has express lanes operating in the following three highway corridors: Interstate 394 The express lanes in the corridor extend Direction Schedule from downtown Minneapolis to the city of Wayzata. The eastbound lane Eastbound 6 a.m. – 10 a.m. extends from County Road 101 to Highway 100, while the westbound lane Westbound 3 p.m. – 7 p.m. extends from Highway 100 to Interstate 494. The corridor also has a reversible Reversible – Eastbound 6 a.m. – 1 p.m. express lane between Highway 100 and Interstate 94. Reversible – Westbound 2 p.m. – 5 a.m. Interstate 35W The express lanes in the corridor opened Direction Schedule in three phases between 2009 and 2011 and extend from downtown Northbound 6 a.m. – 10 a.m. Minneapolis to the city of Burnsville. Northbound – Highway 62 to 3 p.m. – 7 p.m. The northbound lane extends from 26th Street Crystal Lake Road to 26th Street, while the southbound lane extends from 42nd Southbound 3 p.m. – 7 p.m. Street to Highway 13. Southbound – 42nd Street to 6 a.m. – 10 a.m. I-494 Interstate 35E The express lanes in the corridor opened in two phases in 2015 and 2016 and extend from downtown St. Paul to the city of White Bear Lake.
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