Eighteen months after Gov. Tim Pawlenty ordered state agencies and contractors to more aggressively verify workers' immigration status, a state audit has found that the governor's own office has yet to implement the program.

In fact, none of Minnesota's state agencies, which hired about 7,000 workers last year, has used the federal electronic identity-check system known as E-Verify, according to the office of the Legislative Auditor. The agencies hire workers ranging from janitors at the Capitol to health aides at nursing homes to highway work crews.

About 43 percent of the 1,400 private businesses required to use the electronic verification system are doing so, the audit said. Another 16 percent have registered to use the system but haven't yet done so.

"It's a concern that 18 months after an executive order was signed, it's not being implemented'' said Deb Junod, the audit's evaluation manager. "The entire executive branch was directed to use E-Verify and it is not using it.''

The state Office of Management and Budget said it will launch the identity checks by the end of August. The state has been working with a vendor to create a centralized system for screening new hires and is ironing out security issues, said OMB Assistant Commissioner Judy Plante.

Responding to the audit, Pawlenty said he wants the state's bureaucrats to be more forceful in carrying out his order.

"We're not going to be able to go and look over their shoulder in every transaction and every instance, but we have to have enough mechanisms in place to be confident they are doing what they're supposed to do," Pawlenty said.

When Pawlenty ordered all businesses with annual state contracts of at least $50,000 to use E-Verify, it was considered Minnesota's first major effort to stop illegal immigration at its source -- the workplace. Pawlenty had announced about a dozen initiatives to curb illegal immigration during his tenure, but this was the most significant.

"I remember the big press conference when the governor announced this,'' said Minneapolis immigration attorney Bruce Nestor. "If he hasn't ordered state government to use it, it appears this was political grandstanding as opposed to policy implementation.''

Accurate, but flaws remain

The executive order was met with criticism from groups ranging from the Minnesota Chamber of Commerce to immigration rights activists. They charged that the law was too sweeping and the data too flawed for making hiring decisions.

But the audit found that businesses were generally satisfied with the system. It was based on information from 300 of the 1,400 contractors mandated to use the system, said Junod, as well as 206 members of the Minnesota Chamber of Commerce.

"So far using it has been easy, because I haven't run into any snags,'' said Connie Gladen, payroll manager for Gladen Construction, a road construction company outside of Bemidji that has state contracts.

"It took some work to get the system up. You need to do an online tutorial and get tested,'' Gladen said. "But there's technical help once you get started.''

The system takes the names, birth dates and Social Security numbers of job applicants and matches them to federal databases. The audit said a national study found that E-Verify had an error rate of less than 1 percent. But flaws continue, said Joe Bailey, human resource manager at Bailey's Nursery in Newport.

"We had one employee who had been with us 40 years get rejected,'' said Bailey, noting the employee had left the company and reapplied for the job. "Needless to say he was surprised.''

E-Verify is mandated only for new hires, Bailey added. And businesses that use E-Verify are not checked for compliance unless the state receives allegations of violations, the audit found.

"As with other laws, the department will follow up through appropriate channels if allegations of violations are reported," Department of Employment and Economic Development Commissioner Dan McElroy wrote in response to the audit. "However, the department is not responsible for independently verifying that businesses are complying with federal employment laws."

Pawlenty, however, said he would support random compliance checks, with the threat of penalties for violations.

Nationwide, the E-Verify system is being used by more than 100,000 employers. Minnesota is one of about a dozen states that have laws or administrative orders mandating use of the system. The federal government also has an electronic verification system with rules that are different than those in Minnesota, said the audit, which recommended the state adopt the same rules.

Jean Hopfensperger • 651-298-1553 Staff writer Bob von Sternberg and the Associated Press contributed to this report.