Fight over state auditor's job snarls Minnesota budget deal

State capitol under construction
The Minnesota State Capitol building construction, February 2015.
Tim Post | MPR News

It seemed like the hard negotiations were done.

Gov. Mark Dayton and GOP leaders reached a tentative deal Monday on key pieces of the state budget, paving the way for Dayton to call a special session and for the Legislature to finish its work.

But a skirmish between DFL Gov. Mark Dayton and the House GOP over the scope of the state auditor's job is threatening to hold up the special session needed to finish the budget.

Dayton is insisting that lawmakers reverse a change they made to the job description for that office when they return for a special session.

A provision in the finance bill for state government operations, which Dayton signed into law 10 days ago, would allow Minnesota counties to bypass the state auditor and hire private-sector accountants to conduct annual financial reviews.

Dayton, who once served as state auditor, said this week that a change like that is unacceptable.

"If the Legislature wants to eviscerate that office," he told reporters, "they ought to go to the voters of Minnesota in a constitutional amendment and face up to it that way, rather than trying another end run turning the responsibilities of the state auditor over to private CPA firms, which is again eviscerating that principal purpose of that entity. It's a constitutional office, and I just won't agree to it."

The current state auditor, Democrat Rebecca Otto, shares those concerns and is pleased with the governor's strong stand.

"The governor is standing up for the people of Minnesota and our legacy of good government and the core function of this office," she said. "I commend him for that."

Dayton wants lawmakers to repeal the provision as part of the anticipated special session. He said he won't call the Legislature back to St. Paul until there's a crystal clear agreement on every issue.

Republicans are resisting.

"If that was an issue that was a sticking point in the bill he probably should have vetoed that bill rather than signing it," said House Speaker Kurt Daudt, R-Crown.

The governor, he added, is asking for something that he doesn't think he can deliver.

"The problem is getting the votes now to change it, because our caucus obviously gave up some concessions because that was an important point to them," Daudt said. "So, I think it's likely to stay in."

Daudt, who once served as a county commissioner, said county government officials have been seeking this change for years as a way to trim costs. Cities and schools districts already have the option of using private auditors.

Julie Ring, executive director of the Association of Minnesota Counties, said many members view it as an issue of fairness and competitiveness. During a recent interview with MPR News, Ring also stressed that the standards of the private-sector audits would remain high.

"There's been an impression that somehow countries are trying to seek less transparency and accountability," she said. "We don't see it like that at all. We're looking to provide the best product at the best price for the taxpayers that we serve."

Lawmakers crafted the measure in the closing hours of the regular session. Otto said the final product is flawed, because it repeals her existing audit authority on July 1, but doesn't start the revised rules until August 2016.

Otto said it could mean chaos for her office and counties.

"I don't think they understand what they did. I know they don't understand what they did. A big mistake has been made. The people of Minnesota have been robbed of a function that has served our state very well."

The newly enacted law also directs the Office of the Legislative Auditor, which is a separate state government agency, to evaluate the efficiency and effectiveness of the state auditor's office and report back to lawmakers next session.

Otto would not say if she thinks that provision should also be repealed. But she said it would duplicate an analysis that her office already does.

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