Republican Jeff Johnson proposes private audit of state agencies

To curb state spending and shrink the size of government, Republican gubernatorial candidate Jeff Johnson wants to hire a private auditing firm to evaluate the effectiveness of all Minnesota state agencies and programs.

Johnson, a Hennepin County commissioner, has run on a message of tightening state government's belt since securing his party's endorsement earlier this year. If he unseats DFL Gov. Mark Dayton this fall, Johnson said his proposal to scrutinize every state dollar spent in Minnesota's $38.3 billion budget would be a top priority.

Some major elements of the plan remain unclear, such as the total cost and when such reviews would begin. Also to be seen is whether the Legislature would make such a broad-ranging review part of its budget, considering agencies and programs are already reviewed regularly by the nonpartisan Office of the Legislative Auditor.

Johnson insists his proposal is distinct and necessary because it would cover more terrain than the legislative auditor, which evaluates a handful of agencies yearly, with targets determined by a bipartisan commission of legislators.

"We do very, very little measuring," Johnson said, "and there are some programs I have seen that I think probably work pretty well and there are others where I really question whether they're working well or not."

The reviews would take years to complete and would begin with the Department of Human Services, an agency Johnson said is ripe for a detailed examination. The behemoth state agency's $13 billion budget comprises roughly a third of the state's budget, spending the most on payments to hospitals and nursing homes.

"We will celebrate those that can prove they produce the results we claim to want," Johnson has said. "We will end those that cannot."

"This is seemingly duplicative," said Sen. Roger Reinert, DFL-Duluth, and current chair of the Legislative Audit Commission. He and other DFL lawmakers questioned the need for such an effort. "If a governor is saying, we want to do this work, they should look at what the auditor has already done," he said.

Dayton's campaign dismissed Johnson's proposal and argued that state agencies already conduct frequent reviews of the quality of their programs.

"The decades-old accusation that Minnesota government recklessly wastes money on people, who are poor, sick, or elderly is unfair and unfounded," the governor said in a statement.

Dayton's administration furthermore touts the savings it has enacted in a handful of state agencies, including the information technology department, where an overhaul of its operations has saved $27.4 million partly through consolidation.

The largest savings so far have been made through reforms at the Department of Human Services. Lawmakers approved legislation that capped profits for HMOs and instituted requirements that contracts for managed-care be open to competitive bidding. Those changes have saved taxpayers $1 billion, according the governor's campaign.

"Whatever cost this is to the state, the savings will be far more dramatic," said Jeff Bakken, a Johnson spokesman. "The cost is a drop in the bucket in the potential savings."

Johnson said the reviews by a private firm would not overlap with the type of work conducted by the legislative auditor's office, an agency with an annual budget of $6.2 million and staff of about 40 auditors.

"The legislative auditor and his office do a really good job," said Johnson, who served two years on the Legislative Audit Commission when he was a state lawmaker. "I think it's great that we have the legislative auditor, and I think it's fine the way we're doing it right [now], it's just that office doesn't serve the purpose that I'm looking at."

Currently, audits conducted by the commission are selected from requests that come from the public, lawmakers and, on occasion, the executive branch. The commission, made up of 12 senators and representatives from both parties, is charged with winnowing down the dozens of requests to a handful of performance audits it conducts in a year.

The reviews are thorough and take months to complete. A finished report includes recommendations for any changes or reforms, and it is up to the Legislature to introduce bills to follow through on an audit's results.

"It's been such a long time since we've had a reform-minded approach," said Sen. Michelle Benson, R-Ham Lake, a member of the Legislative Audit Commission. "We need to be a bit more careful about how we spend taxpayers' dollars."

State Rep. Michael Beard, R-Shakopee, vice-chair of the Legislative Audit Commission, said that if voters pick Johnson as the state's next executive, the plan "certainly does have a merit."

"It's going to depend a lot on what happens Nov. 5," Beard said. "If voters change control of the House, I think you'd find Republicans would be interested in it."

Sen. Dick Cohen, DFL-St. Paul, chair of the Senate Finance Committee, said that Democrats would not rule out the proposal outright and that any effort to hold agencies more accountable is valuable. Even minimal savings would be worth pursuing, Cohen said, but he expressed deep reservations.

"You can hire whoever you want … and I have no doubt that, absent significant policy changes, you're not going to uncover money that would allow you to take care of state needs like roads and bridges," Cohen said.