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Legislative Update (Aug. 18, 2015)

Tuesday, August 18, 2015

Dear neighbors,

Today the House State Government Finance Committee – one of the committees on which I serve – held a hearing to get feedback from county government officials about their audit practices.

As you may recall, a provision within the State Government Finance bill that passed the Republican-controlled House and Democrat-controlled Senate during the 2015 Legislative Session contained a provision allowing counties to choose whether they would like to hire a private CPA firm or use the Office of the State Auditor (OSA). If a county chooses to use a private CPA firm, that firm must still meet the standards of the OSA and the State Auditor has the authority to make additional examinations. Counties will still have to pay for any additional examinations conducted by the OSA.

Under previous law, the OSA had exclusive authority over audits of counties but had the ability to release individual counties so they could use private CPA firms. In the last audit cycle, the OSA released 28 counties to use private CPA firms.

State Auditor Rebecca Otto has come out strongly against this provision of law and suggested this change was unconstitutional. Given the fact that 28 counties were already given this exemption, it’s hard to see how such a constitutional challenge would prevail. Furthermore, nowhere in the Minnesota Constitution is there a mention of audits by the State Auditor of local units of government.

As I’ve spoken with Carver County officials, they’ve expressed excitement that they could have the ability to choose how to conduct their annual audit. This option may result in significant cost savings to the county and potentially easing the property tax burden on local residents.

The meeting held today in St. Paul was in response to Auditor Otto sending county officials a letter pressuring them into long-term audit contracts with her office.

Given the Auditor’s very public opposition to this provision of law, I’m perplexed that she did not accept our invitation to attend today’s hearing. This was the seventh meeting on this issue and she has not bothered to appear. Auditor Otto talks about transparency and accountability, yet her continued absence suggests she doesn’t believe those principles apply to how she conducts her own official duties as a statewide elected official.