Court to hear arguments in State Auditor Rebecca Otto's lawsuit

A dispute between legislative leaders and State Auditor Rebecca Otto will come to a dramatic head Thursday, as Otto asks a judge to decide whether legislators overstepped their constitutional bounds last year when they approved a law that privatizes county audits.

In February, she sued the state of Minnesota, as well Becker, Ramsey and Wright counties to settle whether the Legislature improperly usurped powers from the constitutional office of the state auditor. The state was later dropped as a party to the lawsuit.

Otto's office performs financial reviews of state tax dollars spent by Minnesota counties, a role that she says would be greatly diminished if counties were allowed to hire private accounting firms.

"This is really a critical case for our constitutional structure, and the question that presents itself is the ability of the Legislature to remove a core protection for the citizens," said Joe Dixon, the attorney representing Otto. "The state auditor is basically a watchdog for state taxpayers."

The case won't be clear-cut, said Fred Morrison, a University of Minnesota Law School professor and state constitutional law expert. He notes that the Minnesota Constitution does not explicitly outline the duties of the state auditor, a role that has existed since before statehood. Moreover, the state auditor has performed different duties over its more than 150-year history, but the power to audit counties was not granted until 1973.

The Legislature then restructured government, changing the auditor's duties from approving executive branch spending to auditing counties, a job previously performed by the now-defunct public examiner's office.

Morrison said the lack of permanent duties, as outlined by the Constitution, makes it tough to determine the outcome. "Can you imply from the fact that there is a state auditor that the auditor is supposed to audit something? Anything?" Morrison said. "Or do you say there's an officer who has that name, and it's up to the Legislature to assign that duty?"

If the law is allowed to stand, "We would lose the independence of the [state auditor's office] and replace it with private CPA firms beholden, not to the people, but to county boards and employees," Carlson wrote.

A request for comment from attorneys representing the counties was not returned.

The Legislature, after years of lobbying by counties, approved the privatizing law last year.

Rep. Sarah Anderson, R-Plymouth, chairwoman of the House State Government Finance Committee, said she's confident the court will side with legislators.

"It is the Legislature's responsibility to set the duties for the state auditor, that's why her budget comes through [the] state finance committee," Anderson said. Her current job duties, she said were "prescribed by the Legislature. That's the only reason she has the authority to do these audits in the first place."