The first outside audit found that state agencies do not fully comply with equal-opportunity laws, resulting in missed job and contract opportunities for people of color, women and people with disabilities.
The audit, ordered by Gov. Mark Dayton, concludes that state agencies do not follow the affirmative action, procurement and human rights laws already on the books to recruit, hire and protect a diverse pool of employees and contractors.
One example: Minority contractors got about 1 percent of the $2.4 billion in federal transportation dollars administered by MnDOT from 2012 to 2014, according to the report.
The 114-page audit, still in draft form, also found that the state has dramatically slashed the budget and staff at the Human Rights Department, which has the job of investigating discrimination allegations and reviewing departmental affirmative action plans.
Problems detected were not always fixed, according to the report. The state Department of Administration failed to correct disparities when found, even though the commissioner had authority to "use set-asides and percentage preferences … to increase contracting with targeted groups."
Although Administration increased its spending with certified businesses owned by people of color from $12.3 million in 2015 to $13.3 million in 2016, that was still less than a fraction of 1 percent of the more than $2.7 billion the department spends each year. Certified Asian businesses received $10.2 million, Hispanics $1.7 million, blacks $888,000 and American Indians $357,000.
"There is a lot of work that needs to be done," said Minneapolis attorney Michael Fondungallah, who wrote the audit with law partner Pamela Kigham and Milwaukee attorney James Hall. "People were signing off and were not following the law and not making the effort to recruit protected-class people."
Social justice advocates say that a lack of opportunity and deep-seated institutional biases play a big role in the state's dismal record of income and educational disparities, and that the report proves it.