1. Presented By Daryl DeKam, CPA, Partner Hennepin Technical College Metropolitan State University Minneapolis Community and Technical College St. Cloud State University Review of Audit June 30, 2005

2. MnSCU- 6/30/05Page 2 Agenda Financial Statement Opinions Compliance Reports Management Letters Significant Transactions Comments and Questions

3. MnSCU- 6/30/05Page 3 Financial Statement Opinions Unqualified Opinions –Hennepin Technical College (third year audit) –Metropolitan State University (third year audit) Includes reference to other auditors for Metropolitan State University Foundation audit –Minneapolis Community and Technical College (third year audit) –St. Cloud State University (first year VK was auditors) Includes reference to other auditors for 2005 St. Cloud State University Foundation The year 2004 is the first year the Foundation’s were reported as component units of Metropolitan and St. Cloud State University.

4. MnSCU- 6/30/05Page 4 Compliance Reports No current year reportable instances of noncompliance requiring disclosure

5. MnSCU- 6/30/05Page 5 Management Letters Management Letter Issued For Each College or University –Includes schedule of passed adjusting journal entries –Includes a schedule of recorded adjustments –Includes standard required audit committee communications Audit work and completion was delayed as a result of the complexities of the compensated absence calculation changes for both classified and unclassified personnel Method for computing scholarship allowances was revised

6. MnSCU- 6/30/05Page 6 Management Letters Comments discussed with school personnel and Office of the Chancellor. Separate communication letters issued to Metropolitan and Hennepin for other observations concerning deferred revenue procedures, journal entry procedures and funds held for others Management and Internal Audit to follow-up on comments

7. MnSCU- 6/30/05Page 7 Significant Transactions Minneapolis Community and Technical College –Co-location transactions with Metropolitan State –Loan from Chancellor’s office balance of $961,000 –Total investment in capital assets of over $26,000,000 in the last two years –Change in equity in 2005 is ($3,614,000) and in 2004 is $11,806,000 (capital allocations in 2004 totaled $12,996,000)

8. MnSCU- 6/30/05Page 8 Significant Transactions Metropolitan State University –Co-location agreement transactions –Repayment of student financial aid amounts to DOE –Investment in capital assets of approximately $18,600,000 in the last two years –New long term debt of over $8,650,000 in last two years –Change in equity in 2005 of ($788,000) and in 2004 $4,082,000

9. MnSCU- 6/30/05Page 9 Significant Transactions Hennepin Technical College –Investment in capital assets of approximately $5,700,000 in last two years –Change in equity in 2005 of $566,000 and in 2004 ($162,000)

10. MnSCU- 6/30/05Page 10 Significant Transactions St. Cloud State University –Investment in capital assets of approximately $21,000,000 in last two years –Change in equity in 2005 of $10,957,000 and in 2004 $13,601,000 –Transactions with the St Cloud State University Foundation

11. MnSCU- 6/30/05Page 11 Other Comments VK audit scope and testing was adequate to issue an unqualified opinion Core business activities are presented by object as well as by function in the financial statements Higher risk – significant transactions received more VK audit attention than routine activity VK reports on internal controls reported no findings VK has considered the risk of fraudulent financial reporting in our audits of the financial statements

12. MnSCU- 6/30/05Page 12 Questions and Comments Thank you for the assistance of the MnSCU personnel.