Auditors evaluating Minnesota’s information technology agency are raising concerns about oversight of software projects, budget transparency and a lack of measures to ensure accountability.

Minnesota IT Services (MNIT) needs to create formal policies for technology budgeting, improve how it tracks its performance, develop better project oversight and clarify what responsibilities it should handle and what falls on other state agencies, according to an evaluation released Wednesday by the Office of the Legislative Auditor. The office also recommended the Legislature develop a committee to oversee decisionmaking in information technology spending.

MNIT developed and launched the faulty drivers’ license and vehicle registration system that its staff has spent the past year and a half fixing. Problems with the Minnesota Licensing and Registration System (MNLARS) prompted legislators to further examine the agency, and the auditor’s office has spent months conducting a deeper dive into how it operates.

“We aren’t recommending extreme solutions — getting rid of MNIT or going the other direction,” said Joel Alter, project manager for the evaluation. “We’re putting some options on the table.”

MNLARS is just one piece of the work of Minnesota IT Services. It serves more than 70 agencies, boards and commissions, according to its latest annual report. Its approximately 2,300 employees manage cybersecurity, maintain technological systems, develop applications and projects, among other tasks.

The state’s IT services haven’t always been handled by one central department. Much of the work was previously done by staff within a particular state agency. The Legislature required IT services be consolidated in 2011. Some lawmakers have since questioned the results of the centralization.

The auditor’s office found it is difficult to judge whether the switch has been successful because the shift is still occurring. There are still some “important and lingering” changes that need to be made to consolidate services and finances, Alter said. It’s also difficult to analyze the consolidation’s success as IT Services doesn’t have enough clear goals, and needs to provide more information on its performance, auditors said.

The change has better positioned the state to fight cybersecurity risks and make bulk purchases of IT software and equipment, the report states. However, the auditors said it is unclear whether spending on IT is more efficient, and state agency staff are divided on whether consolidation has been a positive change.

Auditors surveyed top officials across agencies and found the vast majority are satisfied with the work of MNIT and its contractors on software application services and cybersecurity. But it said they shared “considerable concern” in other areas.

“About half of agencies expressed dissatisfaction with the timeliness of MNIT’s customer support for enterprise services. Also, many agencies are frustrated by what they perceive to be inaccurate IT invoices and time-consuming, redundant IT procurement processes,” the evaluation states.

The majority of state agency officials are not happy with the rates MNIT charges for certain services, auditors stated. But the report said studies show its rates compare favorably to other states and private companies.

In a response to the evaluation, MNIT officials said they are working on making their billing process more transparent to make sure customers understand what they are paying for.

“Minnesota IT Services will continue to institute IT best practices through our ongoing business process transformation efforts, enhance communications with our business partners, and deliver improved IT services to our business partners,” Acting Commissioner William Poirier wrote in his response.

Poirier is the interim leader of the agency; Gov. Tim Walz’s administration is still searching for a new commissioner.

This is the second report the Office of the Legislative Auditor has released in February involving Minnesota IT Services. The office published another report that examined what went wrong with MNLARS and offered recommendations to prevent issues in future software rollouts. The Legislative Audit Commission, a bipartisan group of House and Senate members, is scheduled to review the latest report Friday morning.

While much of the report focused on the IT agency, Alter also said legislators could make some changes. There should be a committee that helps MNIT take a more strategic approach to investments, he said, and lawmakers should clarify outdated state laws about the agency’s responsibilities.

One of the Legislative Audit Commission’s members has suggested a more radical approach. Sen. Mary Kiffmeyer, R-Big Lake, introduced a proposal to abolish MNIT and instead form a Division of Information Technology under the Department of Administration.

“Status quo just will not work. We’ve heard that year upon year, upon year, ‘Just give us more time, just give us more money.’ That answer just does not cut it,” Kiffmeyer said. “So there’s got to be reform.”