OSA Weekly Update - 5/23/2025

1. Message from Auditor Blaha

2. Reporting Out-District Expenditures

3. Reminder: Fire Relief Association Reporting Deadline

4. Avoiding Pitfall: The "Fraud Triangle"

5. Deadlines

1. Message from Auditor Blaha

The TIF Act requires that authorities annually report the amount of any payments for activities and improvements located outside the district that are paid for or financed with tax increment. This includes activities both physically located outside of the TIF district, as well as costs defined as out-district costs under the pooling limitations. For example, authority administrative costs are defined as out-district costs. The TIF Annual Reporting Form includes a line item on the Project Costs tab where these costs should be reported. When preparing 2024 reporting forms, make sure that reporting on this line includes all payments made with tax increments for costs defined as out-district costs. As a reminder, reporting forms are due August 1, 2025.

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

3. Reminder: Fire Relief Association Reporting Deadline

Reporting forms and audited financial statements for relief associations with at least $750,000 in assets or liabilities are due to the OSA by June 30. 

Reporting forms are accessible through SAFES. A short video is provided on our website that walks through the changes in this year’s forms and other recent updates. Detailed instructions on how to access, complete, submit, and electronically sign the forms are provided in this reporting checklist.

4. Avoiding Pitfall: The "Fraud Triangle"

When reviewing the risk of fraud, auditors often refer to the “Fraud Triangle”, first identified by sociologist Donald Cressey. The “points” of the Fraud Triangle are made up of three factors which are present for fraud:

• Incentive/Pressure. A pressure, such as a financial need, is often the “motive” for committing the fraud. One common pressure is a gambling problem.
• Rationalization. The person committing the fraud frequently rationalizes the fraud. Rationalizations may include, “I’ll pay the money back”, “They will never miss the funds”, or “They don’t pay me enough.”
• Opportunity. The person committing the fraud sees an internal control weakness and, believing no one will notice if funds are taken, begins the fraud with a small amount of money. If no one notices, the amount will usually grow larger.

In any organization, the risk of fraud can be reduced. Internal control procedures can particularly diminish the “opportunity” point of the Fraud Triangle.