1. Presented By Daryl DeKam, CPA, Partner Karen Angell, CPA, Partner Hennepin Technical College Metropolitan State University Minneapolis Community and Technical College Review of Audit June 30, 2003

2. MnSCU- 6/30/03Page 2 Agenda Financial Statement Opinions Prior Period Adjustments Compliance Reports Management Letters

3. MnSCU- 6/30/03Page 3 Financial Statement Opinions Unqualified Opinions –Hennepin Technical College –Metropolitan State University –Minneapolis Community and Technical College All of the above are first year individual college audits.

4. MnSCU- 6/30/03Page 4 Prior Period Adjustments Beginning of Year Net Assets Increased (Decreased) as Follows: Hennepin Technical College - $1,335,713 –Miscalculation of fiscal 2002 allowance for doubtful accounts - $1,245,914 –Miscoding of construction in progress to expense in 2002 - $89,799 Metropolitan State University – ($436,362) –Over-award of federal and state financial aid funds – ($1,008,444) –Capitalize project cost of chiller project - $572,082 Minneapolis Community and Technical College – ($21,002,780) –Record land cost - $5,907,145 –Reduce recorded cost of buildings – ($51,803,509) –Change in depreciation related to building cost - $24,893,584

5. MnSCU- 6/30/03Page 5 Compliance Report No reportable instances of noncompliance –Hennepin Technical College –Minneapolis Community and Technical College Metropolitan State University –Noncompliance with certain student financial aid eligibility and academic progress requirements –Described in Note 13 to the financial statements

6. MnSCU- 6/30/03Page 6 Compliance Report Metropolitan State University – excerpt from report (page 46) –As part of obtaining reasonable assurance about whether Metropolitan State University’s financial statements are free of material misstatement …the results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards Other than the University’s noncompliance with certain student financial aid eligibility and academic progress requirements noted as a result of a program review conducted by the United States Department of Education in December 2002, as more fully described in Note 13 to the financial statements.

7. MnSCU- 6/30/03Page 7 Compliance Report Metropolitan State University – excerpt from Note 13 (page 35) –A federal financial assistance program review was conducted at the University by the United States Department of Education in December 2002. –It was determined that the University had granted $933,445 in federal financial aid over-awards for prior years. –In addition, the University determined there was an estimated liability of $75,000 for state grant over-awards in prior years. –These over-awards, totaling $1,008,445 were booked in fiscal year 2003 as an increase to prior period expense.

8. MnSCU- 6/30/03Page 8 Management Letter Management Letter Issued For Each School –Includes schedule of passed adjusting journal entries Comments Discussed With School Personnel and Office of the Chancellor Management and Internal Audit to follow-up on comments