Move Minneapolis leader fires back at scathing city audit

The leader of a nonprofit targeted by a scathing City Hall audit fired back Wednesday, saying the city was aware of the organization's accounting practices and that no business files were destroyed in the partial wipe of a key computer.

Move Minneapolis Executive Director Dan MacLaughlin responded to the city's allegations in a lengthy letter to the organization's board, after initially declining to comment a day earlier. Among other findings, city auditors said the organization overbilled its federal grant and destroyed documents when authorities began investigating.

Move Minneapolis, formerly Commuter Connection, is best known for promoting transit, bicycling and carpooling into downtown Minneapolis. The four-person company, largely funded by a federal grant, is based in the city's new visitor center at 5th Street and Nicollet Mall.

"No funds have been misappropriated. No one got rich off doing business with [Move Minneapolis]," MacLaughlin, who was placed on leave, said in an interview. "And I made some mistakes and I've corrected those mistakes as they've come up."

Auditors found that more than a thousand files had been deleted from MacLaughlin's work computer using a sophisticated program just before they obtained the laptop for analysis. MacLaughlin said they were of a personal and embarrassing nature, though a forensic investigator found similar files remaining on the computer.

"No [Move Minneapolis] files were deleted from the laptop. The deleted documents in question were personal files — movies, music and photos," MacLaughlin said in the letter. "I accept responsibility for those files being placed on the laptop, for deleting those files, and creating an impression that financial data may have been destroyed. I regret my actions."

Move Minneapolis is funded through a federal grant that passes through the city. The grant reimburses 80 percent of eligible costs, requiring a 20 percent local match.

MacLaughlin said he was trained to report transactions that way and that, after an earlier audit raised concerns, a new reporting methodology was developed earlier this year.

"I acted in good faith in recording these transactions," MacLaughlin wrote. "City of Minneapolis staff who reviewed … invoices have been aware of this methodology and have approved invoices for reimbursement since we have entered into" our agreement with the city.

In response to a Star Tribune inquiry, city spokesman Casper Hill highlighted Move Minneapolis' contract language stating it is responsible for following relevant grant rules and will not hold the city liable. "The onus for complying with the grant relies on [Move Minneapolis]," Hill wrote in an e-mail.

Auditor Will Tetsell added that not submitting what was actually paid for reimbursement is problematic. "The reason the federal government does this is because I could say to you, 'Hey, sell me that thing for $10. Actually, I'll pay $10 for it, bill me for $20 and you can say you donated $10 to my organization,' " Tetsell said.

Auditors had also questioned "profit-sharing" paid to employees, but MacLaughlin said this is how a 401(k) plan adviser suggested classifying salary 401(k) contributions. MacLaughlin agreed with auditors that his group had not followed third-party contracting requirements, however.