(This story has been updated.)
State Auditor Rebecca Otto, whose office audits 59 of 87 Minnesota counties among other responsibilities, said a technical glitch in the state government finance bill that passed in the final hours of the legislative session could leave those counties without any auditing.
The intent of one section of the bill, which runs to more than 90 pages, was to allow counties to hire private auditing firms to complete the required review of their accounting and finances. By doing so, they would opt out of the current system wherein they pay the state auditor to complete their audit.
The section of the bill that allows for private audits says it takes effect August 1, 2016. Meanwhile, Otto said she's been advised by her counsel that the bill would repeal a current section of law that gives Otto her auditing authority, but would do so immediately. Otto said this would prevent her office from conducting any audits beginning July 1.
In other words, there would be a one-year gap wherein counties could not use Otto or a private company to audit their books. This would be especially problematic for counties her office has already begun to audit for a Sept. 30 deadline whose programs could lose federal funding without proper auditor sign-off.
"It's a total mess," she said.
The crafters of the measure to allow counties to seek a private auditor say counties can save money by using private auditors, as is currently the case with 28 counties, including Hennepin County. A partial privatization measure was adopted in 2003.
Otto, who is engaged in a furious lobbying effort to get Gov. Mark Dayton to veto the bill, said her office can better protect taxpayers and taxpayer dollars than private firms without proper oversight.
