Reports to public lagging on how Legacy funds being spent

Erosion
Abundant erosion can be seen along the banks of the Blue Earth River in Vernon Center, and much of that sediment eventually ends up in Lake Pepin. A local group received grant money to slow erosion in the rivers and streams that empty into Lake Pepin. The project is described on the state's Legacy website.
MPR Photo/Alex Kolyer

Nearly three years after Minnesotans authorized a new sales tax to send additional money to conservation, arts and parks, there is no public comprehensive list of the funded projects and their outcomes.

Moreover, a quarter of the $456 million allocated in the first two years of the Legacy Amendment is missing from the state website required to be the resource for displaying where and how the tax money is spent, according to an MPR News analysis. And while the website lists broad programs that received money, details are often lacking about which groups or projects received grants and whether the work was finished.

For example, none of the nearly $9 million in clean water funds the Minnesota Department of Agriculture received in the first two years appears on the website. And a website visitor can't find out which groups received part of an $8.4 million Department of Natural Resources conservation grant.

The delays in reporting make it difficult for Minnesotans to judge how well their tax money is being spent. And while lawmakers have access to agencies' internal reporting, funding decisions for the next two years were made before a full accounting of the first two years of Legacy funding was available.

Public accountability is a mandatory part of the Legacy funding process. Voters approved the constitutional amendment in 2008 to send revenue from a three-eighths-cent sales tax to four areas: the outdoors, clean water, arts and culture, and parks and trails. When the Legislature in 2009 approved the first spending plans, it required all recipients of the funds to report on a public website how the money was being used.

Legacy Amendent funds accounting graphic
The above graph shows what percentage of each Legacy Amendment fund for 2010-2011 has been accounted for on the state's Legacy website, which is designed for the public to keep track of the special sales tax dollars. But details are often lacking about which groups or projects received grants and whether the work was finished.
MPR Graphic/Elizabeth Dunbar

Two of the legislators who set up the accountability rules for the Legacy Amendment both said they are content with the reporting on the website so far.

The Legislative Coordinating Commission received $70,000 from the first two years of Legacy funds to design and run the website. The 13 state agencies that receive and distribute the money are responsible for reporting how the money is being spent.

However, it is the first time state agencies have been required to detail to the public on a common website how they were spending taxpayer money, a new requirement that came as they were dealing with a sudden infusion of cash at the same time their general fund budgets were being cut.

Multiple factors have led to delays in Legacy reporting: technical problems, administrative staffing shortages and struggles with juggling the creation of a reporting system while also carrying out new programs for the first time, according to the state agencies responsible for tracking the information. In addition, state lawmakers gave agencies some flexibility on reporting deadlines for the first two years of the amendment.

The reporting process is a "long-term exercise," said Greg Hubinger, director of the Legislative Coordinating Commission. He said some projects — like an arts event — are relatively easy to report on, while tracking for longer-term projects, such as widespread water monitoring or a multi-step land conservation effort, isn't as straightforward.

"What happens with these funds is a really wide range of activities, and trying to capture that in a meaningful way for citizens who want to look at what's going on is the challenge," Hubinger said.

The state Legislative Auditor will report in mid-November on how well the accountability and oversight mechanisms built into the law are working. Auditors will also report on what types of activities have received Legacy funds so far. But it's not their responsibility to give the public a complete list of where Legacy money was spent in the first two years.

PUBLIC MONEY TRAIL TOUGH TO TRACK

The public money trail for Legacy spending is hard to follow and rife with inconsistencies. Vague language in the Legacy reporting rules left the accounting process open to interpretation, at the same time that state agencies said they were forced to use insufficient dollars to keep track of spending.

When the Legislature directed the Legislative Coordinating Commission to create a website to track Legacy spending, it instructed groups to enter funded projects into the site "as soon as practicable," noting that the measured outcome of completed programs should be entered "as soon as it becomes available."

Take a closer look at what's there, and what's missing, from the state's Legacy reporting website.

Most state agencies were able to provide MPR News with documents showing they are keeping detailed internal records of Legacy spending.

• The state Department of Natural Resources is keeping a database of the specific parks and trails projects receiving Legacy funds and tracking their progress.

• The Department of Education has compiled thousands of pages of detailed reports and spreadsheets from the regional library systems showing how they spent arts and culture funds for 2010 and 2011.

• The state Board of Water and Soil Resources and the Department of Agriculture have built their own websites showing all projects funded in the first two years of the amendment.

But those efforts don't mean reporting has shown up on the public website or in any complete form for legislators or auditors.

Minnesota Public Radio is among 18 public broadcasters receiving arts and culture Legacy money. It has submitted financial reports on the $2.6 million it spent in the first two years to the state Department of Administration, which has reported public broadcasters' funding amounts and general program descriptions on the Legacy website.

Because deadlines for some of the funds to spend the money have not yet passed, some groups decided to hold off on reporting, whereas others track things that haven't happened yet, Hubinger said.

For example, the Lessard Sams Outdoor Heritage Council has reported on 100 percent of the outdoors funds it oversees, even though many of those projects are several years from being completed.

Workshop group joking with one another
Above, participants are shown in a program run by the DNR that helps teach people how to camp, in a file photo from Afton State Park on July 1, 2010. The program is described on the state's Legacy website.
MPR Photo/Jeffrey Thompson

However, other state agencies still hadn't compiled all their internal records from the first two years of spending.

Only $6.5 million of Minnesota State Arts Board-administered programs are on the Legacy website so far, out of about $42 million that was allocated for grants and arts programs. The Arts Board website lists more of the grants than the Legacy website, but there are millions of dollars, mostly from regional arts council grants, that have yet to be accounted for in a public way.

Arts Board director Sue Gens said her staff is working on some technical issues to get the information on the thousands of grants it oversees into a format that works well with the Legacy website. In addition, staffers are checking the reports on each grant program for accuracy before shipping information to the Legislative Coordinating Commission.

One reason for the lag time is the limits lawmakers placed on how much Legacy money could be spent on administrative staff — the very people responsible for tracking and preparing reports on Legacy spending.

For example, the Arts Board could only spend 3 percent of its total $43 million appropriation for 2010-2011 on administrative costs, which was a challenge, Gens said.

"It's monitoring visits, it's tracking reports, tracking the outcomes and the degree to which outcomes are met, it's the staff to answer questions from potential applicants, it's reviewing the applications," Gens said.

The administrative cost limits for the first two years of the Legacy were stricter than the limit for federal grants, which is usually 10 percent. But lawmakers this year decided to remove restrictions on administrative costs.

Staffing has also been an issue for state agencies that have seen their general fund budgets cut in recent years. That includes the Board of Water and Soil Resources, which experienced an 11 percent general fund budget cut in 2009 and was dealt 10 percent cut this year, said Assistant Director Julie Blackburn.

Still, Blackburn said the agency has made reporting on its $38 million 2010-2011 Legacy funds a priority and even developed its own web-based reporting system amid concerns the state's Legacy website wasn't up soon enough. But it's taking extra time and effort for staffers to transfer that reporting to the Legislative Coordinating Commission, she said.

"[The staff has] been working on other priorities for us right now. It's just taking the time to ship all of our stuff over there," she said.

Blackburn said she feels a lot more confident about her agency's ability to report spending for the current biennium, because staff will have a better handle on the best way to report and track projects. The goal is to develop a new, user-friendly system that would allow the public to search for a specific project, she said.

"We have to change the mentality from 'we just do good things' to 'we tell people about this because it's their tax dollars,'" she said.

A CALL FOR CLARITY

Officials at the DNR, which received more than half of the 2010-2011 money for parks and trails, said limits on administrative costs generally were not a problem in the first two years of the amendment. The bigger question has been interpreting lawmakers' requirements for reporting back to the public and deciding what level of detail the reporting should include, said Courtland Nelson, the DNR parks and trails director.

Internally, the DNR kept Legacy spending records at a higher level of detail than the agency has provided so far to the state's Legacy website. But keeping a detailed accounting in St. Paul for every DNR Legacy program was a lot easier to do for a capital project like fixing a specific trail bridge than for programming that was distributed across the state park system, Nelson said.

"That's a different payoff, that's a different summary. It's not in a thing, it might be in an activity," Nelson said of programming money that went to parks. "But we still try and get to that point where you, the inquirer, can navigate down to some level of certainty and accuracy."

Two lawmakers who have crafted accountability requirements for the Legacy Amendment both said they've been satisfied with the state's Legacy website. Sen. Richard Cohen, DFL-St. Paul, one of the lawmakers who oversaw the 2010-2011 Legacy appropriation, said the idea was to give the public basic information about where Legacy funds were going while also requiring a higher level of reporting for the Legislature to oversee through its auditor. He said that's why the Legislative Auditor's upcoming report will be so important.

"I don't know that we need to put a lot more burden on a small grantee," he said. "We should defer to the auditor on some things, because that office will have more of an overview of what has been done on a comparative basis."

But Rep. Dean Urdahl, R-Grove City, one of the lawmakers who oversaw the Legacy appropriation approved this year, said reporting on individual projects receiving Legacy money shouldn't be that difficult.

For example, he said, a member of the public should be able to find out on the state's Legacy website how much an author received to speak at a specific library on a certain day. Currently, the website provides descriptions of events held at libraries but doesn't tell the public how much each event cost.

"The idea was that folks would be able to follow the bill and expenditure of the allocation through the process right down to who gets it, what committee or what group gets it, and if they have any conflicts of interest," Urdahl said.

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