MnDOT audit finds shortcomings in contract awards

An internal audit by the Minnesota Department of Transportation has found several shortcomings in the administration of a program meant to award construction contracts to small businesses owned by women and minorities.

For instance, MnDOT said about 8 percent of construction dollars went to such businesses in 2011. But the audit found MnDOT could not back up that claim.

Sen. Scott Dibble, DFL-Minneapolis, says he has asked MnDOT Commissioner Charles Zelle to lay out a plan for correcting the problems.

"Now, this is a problem that he's inherited. So, I don't really lay blame at his feet," Dibble said. "But he has an opportunity to move fairly aggressively to remedy an office that's clearly failing in its core mission."

The audit also found several other problems, including contracts and work going to ineligible firms.

Any MnDOT project receiving federal funds is supposed to have goals for awarding contracts to firms owned by women or minorities. Business owners seeking those contracts must meet certain eligibility requirements, including belonging to a "socially and economically disadvantaged group." Such groups include women, Blacks, Hispanics, Asians, and Native Americans.

Firms receiving contracts must be at least 51 percent owned by a socially and economically disadvantaged individual or individuals in control of the firm. The firms also cannot have more than $17.4 million in annual revenue. Individual owners cannot have a personal net worth exceeding $1.32 million.

"We have stuff that's happening that shouldn't be happening," Dibble said. "Those all add up to a fundamental failure of what is a pretty important mission for this office."

A statement from MnDOT said some of the issues raised by the audit had already been recognized and addressed. The agency said management continues to evaluate the report to determine if other actions are necessary.