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Otto suspects political motivations behind bill undercutting state auditor's office

Minnesota State Auditor Rebecca Otto
MinnPost file photo by Terry Gydesen
Minnesota State Auditor Rebecca Otto: "They’ve got a chance to do this over; they’ve got a chance to fix it. I'm hopeful."

Minnesota State Auditor Rebecca Otto suspects political motivations — by members of her own party — led to a last-minute legislative proposal to allow counties to hire private companies to do the audits her office performs. 

Otto, a Democrat serving her third term as state auditor, said Republicans have pushed for years to allow county governments to seek audits from private companies instead of through the state auditor’s office, but it was an 11th hour agreement between House Republicans and Democrats who control the Senate that moved the provision through.

Otto alienated some members of her own party on the Iron Range last year when she voted against approving a handful of mining leases, and then sent out a fundraising appeal mentioning the vote. Otto took the vote as a member of the state's Executive Council, which is comprised of statewide officers and is tasked with approving mineral leases. Senate Majority Leader Tom Bakk and DFL Sen. Tom Saxhaug, author of the state government bill that included the auditor provision, both hail from the Iron Range. 

“I think it’s a combination of several different things, but Saxhaug is from up there, Bakk is from up there, and there were people who should have known this was happening and were not told,” Otto told MinnPost. “Sometimes when people get sleep deprived they make very poor decisions. It didn’t get properly heard. They’ve got a chance to do this over; they’ve got a chance to fix it. I'm hopeful.”

Saxhaug denied any political motivations in the move, and noted that last-minute deals are common when bills are being negotiated in conference committees. "I came out of private business and I also served on county boards before I came to the state Legislature, and I understand what's going on and I'm always in support of my counties and school boards and school districts being more efficient," he said, adding that school boards and cities can already seek private audits. 

DFL Gov. Mark Dayton hasn’t said if he will veto the state government budget bill, but he promised to fix the language relating to state audits in an upcoming special session, saying he wanted to make that a pre-condition of any session overtime. Dayton previously vetoed a similar measure when Republicans controlled both chambers of the Legislature.

Originally, House Republicans and Senate Democrats had agreed to do a study of the state auditor’s office, but at the last minute, the provision was changed. The measure that was ultimately passed by the Legislature gives Minnesota counties more power to hire private firms for financial audits. Rep. Sarah Anderson, R-Plymouth, who authored the state government bill in the lower chamber, said on the House floor that county governments asked for the change because the state’s process is slow and cumbersome.

Otto said she fears private firms will undercut her office and provide less transparent and independent reviews. What's more, Otto said the way the bill was drafted at the last minute will simply strip a mandate for counties to get audits starting July 1.  The language allowing private companies to do county audits doesn't kick in until the following year, leaving a huge gap local government oversight, she said. "This is creating a horrendous mess." 

State Sen. Tom Saxhaug
State Sen. Tom Saxhaug

“The Senate is usually a very deliberative body,” she added. “They had a couple of people who knew about it and voted for it. I think people were confused."

"There were games being played, clearly games were being played," she added. "It's clearly an injustice to the people of Minnesota. Once this function is gone from this office it's not coming back." 

After the mining kerfuffle last year, “Dump Otto” signs popped up in yards in northeastern Minnesota. Otto also got a primary challenger in former DFL House Minority Leader Matt Entenza, who tried to rally Iron Range Democrats to his side. In the end, Otto trounced Entenza with more than 80 percent of the vote and won the general election against Republican challenger Randy Gilbert on a 53-to-38 margin. “As a state auditor I'm always going to do my job without fear or favor,” Otto said. “Sometimes that ruffles feathers.”

Saxhaug said there's still time to change the bill if local governments don't want the option. "This is no madate, it's just a choice they can make," he said. 

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Comments (12)

Hell hath no fury like the rangers

We need to repeal the taconite amendment. Giving special tax status to mining set up a slush fund for the northern section for the state that created a political fiefdom that is now teaming up with industrial agriculture to the south to extract and pollute. Sorry I ever voted for Elmer Anderson.

Assessment of the Year Award contender #1

"a political fiefdom that is now teaming up with industrial agriculture to the south to extract and pollute."

I don't know about the "the taconite amendment" and the "special tax status to mining" or the "slush fund" (as in, I literally don't know anything about that aspect of things), but couldn't agree more with the stuff above. Great summary.

Bakk can't be trusted

He's proven that. I don't know who this other clown is, but they need to stop the game playing and get their jobs done. Oh and speaking of games, House leader Daudt played Bakk like a fiddle in those negotiations.

Otto is worthless

Otto isn't qualified to do her job and that is why legislators allowed Counties to seek out cheaper and better alternatives. How could a private firm be any less transparent than the government is? What a joke these people are. BTW, Counties were already doing this before the legislation was passed.

Small edit

The real question is "How could a private firm hired by the people it is supposed to be auditing be any less transparent than the government is?"

They would issue an audit

They would issue an audit report with opinion.

"An audit report with opinion"

That and $3.50 will get you a small latte.

The logic behind having the State Auditor's Office do audits of local governments is that the independence of the auditor will be preserved. How much confidence would there be in an audit report--even one with opinion--issued by auditors hired by the people whom they were supposed to audit? Kind of like the fox hiring the guard at the henhouse, I would say.

Otto

Agreed - The campaign sign for her next opponent should be "Actually Qualified".

Funny...

Her peers (that means people who work in the auditing industry) think otherwise. I'll take their word over some clown on the internet.

2014 Named one of 15 Most Influential Professionals in Government Auditing by the Institute of Internal Auditors, the 180,000-member international auditing professional organization. In naming her the group cited the "courage, integrity, and leadership necessary to confront and overcome political and public pressures."[6]

2014 recipient of the President’s Award from the National Association of State Auditors, Comptrollers and Treasurers (NASACT). "State Auditor Otto was honored with the award to recognize her national leadership and her efforts to improve government operations as one of NASACT’s representatives on the national Alliance to Transform State Government Operations (Alliance)." [7]

2013 Elected by her nonpartisan peers to be President of the National State Auditors Association.[8]

2010 Received the Distinguished Service Award from the Minnesota State Fire Chiefs Association,[9] for her work overhauling state fire laws. Otto is the sixth person and first Constitutional Officer to receive the group's high honor.

2009 Honoree of the National Women's History Month, alongside Hillary Clinton, Sally Ride, Jane Goodall, and other "Women taking the lead to save our planet," the 2009 theme, for her environmental leadership.[10]

2009 Recipient of the The National State Auditors Association[11] "Excellence in Accountability Award" for her special project "Best Practices Review: Reducing Energy Costs in Local Government"[12]

I wasn't aware of all this recognition for excellence in...

...her work.

I wonder if we've EVER had a state auditor who enjoyed the praise of her peers to this degree ??

How could a private firm be any less transparent

"How could a private firm be any less transparent than the government is?" asked Enron as it took bids for its auditing work.

Right, letting the audited pick and auditor who depends on pleasing the audited if it hopes to keep getting work. Brilliant.

can people in the iron range quit whining

Brazil is about to open a massive taconite mine that will flood the market with what is considered 'very high quality ore.' Want a job? Move to the Dakotas. There is no future in taconite.