Delays have "eroded confidence" in state's vehicle licensing upgrade

A nearly decadelong effort to upgrade Minnesota's driver's license and vehicle registration computer system has "adequate" management and security controls, but delays and vague missives have "eroded confidence in the project," a state review found.

A new web-based information system called the Minnesota Licensing and Registration System (MNLARS) was supposed to be operational in 2014, but after spending nearly $60 million on it, only a tiny portion of the upgrade is online, according to a report released Monday by the state legislative auditor.

The Legislature ordered the review — which is less comprehensive than a full audit — expressing its "long-standing concerns" about the status of the upgrade.

MNLARS is being developed by the Department of Public Safety's Driver and Vehicle Services (DVS) division and the state's information-technology agency, Minnesota IT Services (MNIT).

The two departments were chosen after the state parted ways in 2014 with the original contractor — tech giant Hewlett-Packard Co. — due to missed deadlines and "poor quality of work," the report notes.

The MNLARS overhaul affects millions of Minnesotans. About 1.5 million vehicle titles, 4.7 million registrations and 1.5 million driver's licenses were issued in 2015 alone.

The project involves replacing an aging information system marred with "numerous weaknesses," the report states. Currently, DVS uses a combination of paper documents, a mainframe computer system that is more than 30 years old, and a limited web-based system to conduct transactions and manage and store data.

Clear and specific information regarding the project needs to be better communicated to those who will use the system, the report said. "The relationship between DVS and some deputy registrars, and between DVS and some auto dealers, is strained," it added.

In 2008, the Legislature approved a $1.75 surcharge on vehicle registration renewals, titles, driver's licenses and identification card transactions to help pay for the project. The surcharge was extended until June 2016, but beginning in 2012, it was reduced to $1. In 2011, the Legislature also transferred $7.1 million to the project.

By the end of fiscal 2016, nearly $104 million was in the MNLARS account, with $1.9 million more expected in collections this year.

This year, lawmakers chipped in $16 million more for the next two years to help with the system's maintenance and operations once it goes online.

In a letter to Legislative Auditor James Nobles, representatives from the Department of Public Safety and MNIT said they agreed with the report's conclusions. "The MNLARS project has a very robust communication plan that aims to gather continuous input from stakeholders and provide ongoing status updates," the letter said.