The Minnesota State Board of Trustees convened on May 20, 2025, to discuss critical issues surrounding internal audits, investigations, and the management of foundations within the Minnesota State system. The meeting highlighted the ongoing efforts to enhance accountability and transparency across the state's educational institutions.

The session began with a detailed discussion on risk assessment in internal audits. Officials emphasized the importance of distinguishing between low and high-risk items, citing examples such as the need for additional approvals in compliance processes versus significant errors in IT controls that could lead to substantial losses. The internal audit team is committed to refining their risk classification methods to better inform stakeholders.

Next, the board addressed the implementation of an online reporting system for fraud allegations, which has been a long-awaited initiative. Despite the system being in place, officials noted that no reports had been received yet, attributing this to a lack of awareness among employees. The board discussed strategies to promote the new reporting tool, including integration into employee training programs and awareness campaigns during Fraud Awareness Week.

Investigations were a significant focus, with the board reporting a record number of allegations—34 new cases in the past year. Of these, 20 investigations were completed, with 11 confirming allegations. The board highlighted the importance of addressing not only individual misconduct but also the systemic weaknesses that allow such issues to arise. Recommendations for improving internal controls were emphasized as a crucial part of the investigative process.

Concerns regarding double employment among staff were raised, with discussions on the implications of employees holding multiple jobs simultaneously. The board acknowledged the complexities involved, particularly in cases where teleworking arrangements blur the lines of accountability.

The meeting also touched on issues related to foundations associated with the Minnesota State system. While these foundations operate as separate entities, the board expressed concern over the lack of oversight and accountability in their financial practices. Instances of inadequate accounting controls were noted, prompting discussions on the need for clearer policies and better training for those managing foundation funds.

Trustees raised questions about the legal and reputational liabilities associated with foundation mismanagement, emphasizing the importance of maintaining the integrity of the Minnesota State brand. The board acknowledged the challenges posed by the independent nature of foundations while reiterating the need for adherence to best practices and legal requirements.

In conclusion, the meeting underscored the Minnesota State Board of Trustees' commitment to enhancing governance, accountability, and transparency within the state's educational institutions. The board plans to continue refining its processes and policies to address the challenges identified during the discussions, with a focus on improving internal controls and fostering a culture of integrity across the system.